OZ Management LP Fined $4.25 Million For Misleading Data

The US Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission (SEC) has fined investment advisor, Oz Management LP, $4.25 million after charging the company with providing inaccurate trade data to its four prime brokers, which later flowed into SEC investigation data, according to an announcement by the regulator today (14 July).

A subsidiary of Och-Ziff Capital Management Group, the firm admitted to wrongdoing spanning an almost six-year period. The charges relate to the intentional misidentification of trade data provided to its four prime brokers, which consequently led to inaccuracies to the tune of approximately 552 million shares in the brokers’ books and records.

Indeed, the inaccuracies meant that the brokers violated federal securities laws and SEC rules requiring accurate books and records.

OZ Management’s inaccurate data had a substantial ripple effect that the SEC staff discovered through diligent investigative work.

Furthermore, via “blue sheet” requests issued by the SEC, the brokers’ broken data was incorporated into various SEC records and data. “Blue sheets” are issued by the regulator to seek information related to specific transactions in order to determine wrongdoing following unusually volatile market behaviour. As a result of the false information received by the SEC during its investigations, approximately 14.4 million shares were inaccurately reported.

In terms of the actual misleading data, SEC reported that “the discrepancy arose for trades where OZ Management did not characterize sales as long or short based on how they were marked when they were sent to the market but filtered them based on other factors, such as the relevant fund’s position in the stock at the Prime Broker Prime Broker Prime brokers are the designation given to individuals handling a package of services offered by investment banks, wealth management firms, and securities dealers to hedge funds which need the ability to borrow securities and cash in order to be able to invest on a netted basis and achieve an absolute return.There are two types of prime brokers - bank and non-bank corporations. Traditionally major global investment banks have been the predominant players in the space, however recent years have p Prime brokers are the designation given to individuals handling a package of services offered by investment banks, wealth management firms, and securities dealers to hedge funds which need the ability to borrow securities and cash in order to be able to invest on a netted basis and achieve an absolute return.There are two types of prime brokers - bank and non-bank corporations. Traditionally major global investment banks have been the predominant players in the space, however recent years have p Read this Term.”

“The SEC relies on the accuracy of the books and records of financial institutions and blue sheet data,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement. “OZ Management’s inaccurate data had a substantial ripple effect that the SEC staff discovered through diligent investigative work.”