Broker-Dealer Fined for Submitting Inaccurate Transaction Reports to TRACE

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

In a Letter of Acceptance, Waiver and Consent, FINRA found that the broker-dealer (i) reported corporate debt transactions to TRACE after the applicable deadline; (ii) incorrectly appended the "No Remuneration" indicator to corporate debt securities that included a commission; (iii) erroneously reported internal transfers to TRACE as corporate debt or Treasury transactions; (iv) inaccurately reported the size of corporate factor bond transactions due to a failure to adjust the bonds' principal value for previous partial redemptions; and (v) reported inter-dealer securitized products transactions that incorrectly identified the counterparty as a customer. Additionally, FINRA determined that the broker-dealer's supervisory controls were insufficient and 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 $675,000.

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