Broker-Dealer Fined for Inaccurate Short Interest Position Reports

A broker-dealer settled FINRA charges for reporting inaccurate short interest position data.

FINRA found that the broker-dealer reported short interest positions that were custodied with, and already reported by, its clearing firm. Additionally, FINRA found that the broker-dealer generated its automated short interest data reports before certain same day trades settled, which caused the firm to misreport or fail to report certain short positions. FINRA stated that failures occurred in part due to inadequate supervisory policies.

FINRA determined that the firm violated FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade"), Rule 3110 ("Supervision") and Rule 4560 ("Short-Interest Reporting"). To settle the charges, the broker agreed to (i) a censure and (ii) a civil monetary penalty of $150,000.