A broker-dealer agreed to pay a $2.8 million fine in order to settle FINRA charges that it violated SEC and FINRA rules with respect to trade reporting, Order Audit Trail System ("OATS") reporting, books and records, and related supervisory requirements.
FINRA alleged that:
- a system configuration error caused the firm to, among other things, (i) make inaccurate reports concerning millions of trades, in which purchases were reported as principal sales and agency crosses, to a FINRA Trade Reporting Facility, and (ii) report millions of trades that it was not required to report;
- the firm encountered a number of separate system errors that caused it to (i) report millions of inaccurate reportable order events to OATS, including inaccurate timestamps, and broker-dealer orders reported incorrectly as customer orders, and (ii) fail to report millions of execution reports; and
- the firm failed to record certain special-handling instructions, as well as correct receipt and route timestamps on order tickets, which caused millions of records to be inaccurate.
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