E*Trade Securities LLC, TradeStation Securities Inc. and CIBC World Markets Corp. have collectively been fined $1.6 million for their failure to fulfill their obligation to accurately report data about equity securities orders and ensure compliance with applicable Financial Industry Regulatory Authority regulations.
FINRA announced the fines earlier this month. Along with the announcement, FINRA’S Market Regulation Department stressed how it is the firms’ responsibility to vigilantly monitor the thoroughness and accuracy of information that they give to regulators.
FINRA mandates that member firms must record information about NASDAQ listed equity securities orders, including when they are originated, received, sent, executed, canceled, or modified. All data must be electronically recorded and sent to OATS, FINRA’s Order Audit Trail System. The information is critical because it lets FINRA recreate an order’s life cycle and helps the SRO regulate more effectively.
FINRA says that TradeStation Securities Inc. did not report about 23.5 million “events” connected to such orders. The firm is paying the largest fine at $750,000. E*Trade Securities has been to pay a $500,000 fine.
CIBC’s fine is $350,000 for failing to report an affiliate firm’s more than 28 million orders. CIBC’s fine would have been higher except that the firm has already taken action to report the deficiencies and remedy the matter.
All three firms agreed to FINRA’s findings without deny or admitting to the SRO’s charges.
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Related Web Resources:
FINRA Fines Three Firms a Total of $1.6 Million for OATS Reporting and Supervision Violations, FINRA.org, May 15, 2008
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving Proposed Rule Change Relating to the Reporting of Foreign Equity Securities to the Order Audit Trail System, SEC.gov, September 28, 2007