IT Failures Result in $6 Million Fine

FINRA fined a large investment bank $6 Million because programming errors resulted in the provision of inaccurate trade data to regulators over an 8-year period.  FINRA asserts the firm misreported more than 1 million “blue sheet” transactions because of programming errors and failures to upgrade systems after regulatory changes.  FINRA also faults the firm for failing to implement proper supervisory and audit systems.  Regulators use the blue sheet data for regulatory and enforcement purposes including monitoring of insider trading.

OUR TAKE: One of the most-overlooked compliance risks involves the failure of IT systems to follow regulatory guidelines.  A disconnect between the IT folks and the compli-pros can create serious systemic weakness.