Last week, the Financial Industry Regulatory Authority (FINRA) announced that 19 broker-dealers agreed to pay fines to settle SRO charges that they “substantially overstated their advertising trade volume to private sector providers.” By agreeing to pay the fines, none of the firms are admitting to or denying the charges.
FINRA says that after comparing each firm’s advertised trade volume in selected securities with executed trade volume for the same issuer, they noticed overstatements that were substantial in at least one of the securities examined.
Broker-dealers that agreed to be fined $200,000:
Lehman Brothers Inc.
Broadpoint Capital Inc.
Merrill Lynch, Pierce, Fenner & Smith Inc.
CIBC World Markets Corp.
UBS Securities LLC Needham & Co. LLC Thomas Weisel Partners LLC Robert W. Baird & Co. Inc
Broker-dealers that agreed to be fined $150,000:
Pacific Crest Securities Inc.
Bear, Stearns & Co.
Leerink Swann & Co. Inc Deutsche Bank Securities Inc.
BMO Capital Markets Corp.
RBC Capital Markets Corp.
Broker-dealers that agreed to settle for $50,000:
Jefferies & Co. Inc.
Pacific Crest Securities Inc Friedman, Billings, Ramsey & Co. Inc.
JMP Securities LLC
Piper Jafray & Co. will pay a reduced, $100,000 fine because of its in-depth self-probe. All of the fines total $2.8 million.
SRO says that none of the firms before September 2006 had a proper supervisory system or procedures in place to convey trade volume to private service providers, who used the overstated information they were given to create reports. NASD’s Notice to Members 06-50, published in September 2006, is a reminder that accuracy when providing trading volume and interest is mandatory.
The stockbroker fraud law firm of Shepherd Smith and Edwards represents investors who have lost money because a member of the securities industry engaged in misconduct or deception. Please contact Shepherd Smith and Edwards today to request your free case evaluation with one of our stockbroker fraud lawyers.
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