Procedures, no matter how good they may be, only work to the extent the underlying inputs are complete. Here, the firm was on notice that one relevant input, daily trade blotter information, was incomplete; the firm's system did not capture direct business transactions. As a result, the firm was unable to review such transactions for suitability and other potential sales practice violations. Similarly, the firm’s investment profile information, which was used by the firm to review…
This matter reflects the importance of firms’ following up on deficiencies identified by FINRA as well as the importance of having reasonable oversight of such follow up activities. Here the firm, after receiving FINRA’s initial notice, began to implement a fix, but failed to continue its efforts due to a coding issue. Had the firm assigned someone the task to ensure that the corrective efforts were either continued or completed, it is likely that the firm could have avoided this matter.…
Mistakes happen - even with the best of procedures. The firm’s problem here, however, and the reason for Nasdaq’s enforcement action, stem from the fact that the mistakes relating to the pricing of reverse stock splits kept happening. This included the firm’s failure to address a known problem relating to stock splits for almost an entire year, which problem was responsible for two of the pricing issues, and by the failure, in some cases, of firm personnel to resolve inconsistent data…
Over the last several decades, exchanges, globally, have moved from a non-profit entity member owned structure, to a for-profit structure owned by public or private investors. In the report, IOSCO describes this evolution together with the accompanying expansion by exchanges of business lines, the increasing tendency of exchanges to operate across geographic boundaries and changes in secondary, non-exchange, markets that have arisen alongside these changes. IOSCO then considers the impact of…
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Procedures, no matter how good they may be, only work to the extent the underlying inputs are complete. Here, the firm was on notice that one relevant input, daily trade blotter information, was incomplete; the firm's system did not capture direct business transactions. As a result, the firm was unable to review such transactions for suitability and other potential sales practice violations. Similarly, the firm’s investment profile information, which was used by the firm to review…
This matter reflects the importance of firms’ following up on deficiencies identified by FINRA as well as the importance of having reasonable oversight of such follow up activities. Here the firm, after receiving FINRA’s initial notice, began to implement a fix, but failed to continue its efforts due to a coding issue. Had the firm assigned someone the task to ensure that the corrective efforts were either continued or completed, it is likely that the firm could have avoided this matter.…
Mistakes happen - even with the best of procedures. The firm’s problem here, however, and the reason for Nasdaq’s enforcement action, stem from the fact that the mistakes relating to the pricing of reverse stock splits kept happening. This included the firm’s failure to address a known problem relating to stock splits for almost an entire year, which problem was responsible for two of the pricing issues, and by the failure, in some cases, of firm personnel to resolve inconsistent data…
Over the last several decades, exchanges, globally, have moved from a non-profit entity member owned structure, to a for-profit structure owned by public or private investors. In the report, IOSCO describes this evolution together with the accompanying expansion by exchanges of business lines, the increasing tendency of exchanges to operate across geographic boundaries and changes in secondary, non-exchange, markets that have arisen alongside these changes. IOSCO then considers the impact of…