FINRA imposed a $1.3 million fine for systemic Order Audit Trail System ("OATS") reporting violations and related supervisory failures. Specifically, FINRA identified fifteen systemic issues at the bank. FINRA found that the bank: (i) transmitted approximately 3.6 billion inaccurate or incomplete reportable order events ("ROE") from 2008 to the present time, (ii) failed to transmit millions of ROEs to OATS, and (iii) failed to ensure that its supervisory system was designed to maintain compliance with its OATS reporting obligations.
FINRA Executive Vice President and Head of Market Regulation Thomas Gira noted the potentially dire consequences of such failures:
When firms fail to transmit OATS data or transmit inaccurate or incomplete data to OATS, market integrity is compromised because potential violative conduct, including manipulative activity and customer harm, may be obscured. . . . OATS data is essential to FINRA's automated equities surveillance program and is therefore critical to investor protection.
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