Broker-Dealer Settles Charges for Blue Sheet Inaccuracies

A broker-dealer settled SEC charges for reporting incomplete and inaccurate securities trading information on required electronic blue sheet ("EBS") submissions.

As outlined in the Order (see paragraphs 6 and 7), the SEC found a number of failures with respect to the EBS submissions. In addition, the SEC found that the firm did not satisfy its supervisory obligations, stating that it failed to "conduct adequate periodic sampling, manual validation, and review of information received from third parties, or have proper quality controls in place to ensure the completeness and accuracy of its EBS data prior to its submissions." The SEC acknowledged, however, that the broker-dealer engaged in remedial efforts to address the causes of the deficient submissions, including "voluntary, full-scale analysis of its EBS program."

To settle the charges, the broker-dealer agreed to (i) a censure and (ii) a $6 million penalty. Separately, FINRA reached a settlement with the broker-dealer for related conduct.