Firm Fined $2.95 Million for Mis-Reporting Trade Data to FINRA
FINRA fined a broker-dealer affiliate of a global asset management firm $2.95 Million for failing to provide accurate “blue sheet” trading data when requested over a 3-year period. FINRA alleges that the firm experienced “multiple problems” with its electronic systems, resulting mis-reporting of buys and sells, miscalculating net amounts, and failing to provide accurate customer information. FINRA also faults the firm for failing to implement an adequate audit system. FINRA Executive Vice President and Head of FINRA’s Office of Fraud Detection and Market Intelligence, Cameron Funkhouser, advised, “All introducing and clearing firms should take inventory of their processes for producing accurate trading data to ensure that they are in position to comply with blue sheet requests from regulators in a complete and timely manner.”
OUR TAKE: The regulators will impose significant fines for even technical violations where they feel the firm has failed to take stock of internal controls, especially over long periods of time.