Broker-Dealer Fined for Disclosure Failures on Customer Confirmations

A broker-dealer settled charges with FINRA for failing to include required information on customer confirmations for municipal securities transactions.

In a Letter of Acceptance, Waiver and Consent, FINRA stated that the broker-dealer failed to disclose on customer confirmations the time of executions and mark-ups and mark-downs. FINRA found that the broker-dealer incorrectly applied a non-transaction-based compensation ("NTBC") special condition indicator to muni confirmations on which the firm had charged a mark-up due to vendor error.

FINRA concluded that the broker-dealer violated MSRB Rule G-14 ("Reports of Sales or Purchases"), G-15 ("Confirmation, Clearance, Settlement and Other Uniform Practice Requirements with Respect to Transactions with Customers") and G-27 ("Supervision").

To settle the charges, the broker-dealer agreed to (i) a censure and (ii) pay a $50,000 fine.