Broker-Dealer Fined for Incorrectly Reporting Transactions to TRACE

A broker-dealer settled FINRA charges for mislabeling and over-reporting securities transactions to the Trade Reporting and Compliance Engine ("TRACE").

In a Letter of Acceptance, Waiver and Consent, FINRA found that in certain instances, the broker-dealer erroneously reported Treasury transactions with no change in beneficial ownership to TRACE, and in other instances, applied an incorrect modifier to its TRACE-reported Treasury transactions. Additionally, the broker-dealer's supervisory controls relating to TRACE reporting were insufficient, which FINRA said contributed to the errors.

The broker-dealer was found to have violated FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade"), Rule 3110 ("Supervision") and Rule 6730 ("Transaction Reporting"). To settle the charges, the broker-dealer agreed to (i) a censure and (ii) a civil monetary penalty of $375,000.