The US-based broker-dealer arm of French banking giant Société Générale on Wednesday agreed to pay $3.1 million for failing to provide accurate and complete “blue sheets” on over 27.6 million trades over a period of several years.
In an administrative order, both the Finra and the SEC faulted SG Americas Securities for providing deficient blue sheet submissions that included incorrect order execution times, missing exchange codes, transaction type identifiers, opposing broker number and contra-party identifiers.
The firm admitted to the charges and agreed to pay a $1.55 million penalty for each regulator. They will also enhance their reporting systems to remedy issues related to so-called blue sheets, as part of its settlement with the US top regulator.
“The order finds that SG Americas submitted missing or incorrect data for approximately 27.6 million transactions and had inadequate processes designed to validate the accuracy of its submissions. Broker-dealers are required to provide trade data, which the SEC uses to carry out its enforcement and regulatory obligations, including investigations of insider trading and other fraudulent activity,” the SEC said in a statement.
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Many brokers were fined for similar lapses
According to federal securities laws, firms are required to provide certain trade data, aka blue sheets, to SEC and other regulators electronically upon request. Finra and the Securities and Exchange Commission (SEC) regularly request such information to help prevent and stop market manipulation and insider trading.
Blue sheets provide critical detailed information about securities transactions, including the security, trade date, price, share quantity, customer name, and whether it was a buy, sale, or short sale transaction.
The SEC has probed, fined several Wall Street banks and brokerage firms for similar lapses, including Citadel Securities, Natixis Securities Americas, and MUFG Securities Americas as it examines whether they have broken controls designed to prevent market abuse and tax fraud.
The SEC had previously fined Citigroup a record $7 million penalty for similar compliance failures. Also, Credit Suisse and Oz Management LP, $4.25 million were both fined $4.5 million.