FINRA Fines Firm for Failures in Processing Customer Account Transfers

A firm settled FINRA charges for failing to timely process over 1,200 customer account transfer requests.

According to the AWC, the firm entered into an omnibus arrangement under which its clearing firm handled Automated Customer Account Transfer Service ("ACATS") requests. FINRA said the firm was responsible for providing necessary account information to facilitate transfers because the clearing firm lacked visibility into the firm's customer-level data. FINRA found that the firm failed to provide timely information to the clearing firm for 1,206 customer account transfers, resulting in those requests being purged from the ACATS system. 

FINRA determined that the firm violated FINRA Rule 11870 ("Customer Account Transfer Contracts") and Rule 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the firm agreed to (i) a censure and (ii) pay a $100,000 fine.