A broker-dealer agreed to settle FINRA charges for (i) transmitting to the Order Audit Trail System ("OATS") 23,882,352 reports that contained "inaccurate, incomplete, or improperly formatted data," and (ii) failing to transmit 13,585,009 Reportable Order Events (ROEs) to OATS. In addition, the broker-dealer was charged with failing to have a sufficient supervisory system designed to ensure that it followed OATS reporting requirements.
According to the Letter of Acceptance, Waiver and Consent, Cowen and Company, LLC agreed, among other things, to a censure and to pay a fine of $175,000.
Commentary / Steven Lofchie
This enforcement action again demonstrates that the number of violations that occur when there is a technology failure relating to trade reporting is astronomical. This means that FINRA's guidance as to the appropriate level of fines is meaningless, since, under the guidelines, even the largest firms could be hit with fine amounts that would be devastating.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.