US regulatory authority for securities, the Financial Industry Regulatory Authority (FINRA), has reported that it has issued a fine to two major US brokerages for breaches of its rules. TD Ameritrade and SG Americas were both awarded with a financial penalty from the watchdog for failures in transaction reporting and supervisory deficiencies.
The independent securities regulator issued a total fine of $1.8 million to the firms, the official press notification stated that FINRA, “Has fined TD Ameritrade Clearing, Inc. $1,150,000 and SG Americas Securities, Inc. $675,000.”
Thomas Gira, Executive Vice President, FINRA Market Regulation, said in a statement, “It is essential that regulators receive accurate, timely and complete information about large options positions, particularly those positions that involve accounts trading in concert, because this information is necessary to conduct market surveillance and to protect the integrity of the marketplace.”
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Details in the order state that: “FINRA found that from May 2007 to January 2010, TD Ameritrade failed to properly aggregate certain reportable positions as acting-in-concert, which impacted nearly 4,100 accounts and resulted in the firm failing to report approximately 1.4 million positions. In addition, TD Ameritrade failed to establish and maintain reasonable supervisory procedures and supervisory systems to ensure compliance with rules applicable to the accurate reporting of options positions.”
The order continues: “FINRA found that from December 2007 to January 2013, SG Americas failed to report over-the-counter (OTC) options positions in approximately 500,000 instances; failed to report the counter-party for OTC options positions or incorrectly reported its customers’ OTC options positions in more than 600,000 instances; and failed to report or misreported OTC index options positions in more than 900,000 instances. Additionally, SG Americas failed to establish and maintain reasonable supervisory procedures and supervisory systems to ensure compliance with rules applicable to the accurate reporting of options positions.”