Broker-Dealer Settles FINRA Charges for Options Positions Reporting Failures

A broker-dealer settled FINRA charges for failing to report, or to report accurately, options positions to the FINRA Large Options Positions Reporting ("LOPR") system.

In a Letter of Acceptance, Waiver, and Consent, FINRA said that the broker-dealer did not report, or failed to report accurately, large OTC options positions and exchange traded fund options positions to the LOPR. FINRA stated that the firm (i) failed to properly aggregate positions on the same side of the market and (ii) inadvertently applied a suppression logic to certain reportable ETF options positions. FINRA found that, on certain occasions, the reporting failures were due to coding errors.

FINRA determined that the broker dealer violated Rule 2360(b)(5) ("Options") Rule 3110 ("Supervision") and Rule 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the broker-dealer agreed to a (i) censure and (ii) $2.5 million fine.