FINRA fines Wedbush Securities over reporting violations
Between January 1, 2017 and June 30, 2017, Wedbush failed to transmit to OATS 237,457 reportable order events and inaccurately transmitted an additional 82,959 ROEs.
Wedbush Securities has agreed to pay a fine of $30,000 as a part of a settlement with the United States Financial Industry Regulatory Authority (FINRA) over reporting violations.
FINRA Rule 7450 requires member firms to transmit to OATS, in an electronic format prescribed by FINRA, a report containing each applicable item of order information whenever an order is originated, received, transmitted to another department within the member or to another member, modified, canceled, or executed.
FINRA Rule 7460 states that a member firm’s failure to comply with Rule 7450 may constitute a violation of FINRA Rule 2010, which requires members to observe high standards of commercial honor and just and equitable principles of trade.
Between January 1, 2017 and June 30, 2017 (the “Review Period”), due to system issues that arose during Wedbush’s transition between third-party order management systems, Wedbush failed to transmit to OATS 237,457 ROEs on 117 business days. These 237,457 ROEs constitute 19.98% of the 1,188,593 ROEs submitted by the firm during the Review Period.
In addition, due to the same systems issues, Wedbush transmitted to OATS 82,959 ROEs containing inaccurate, incomplete, or improperly formatted data. Specifically, the reports contained inaccurate Sent to Firm MPIDs. These 82,959 inaccurate ROEs represent 6.98% of the 1,188,593 ROEs submitted by the firm during the Review Period.
Due to the above-described behavior, Wedbush violated FINRA Rules 7450 and 2010. On top of the fine of $30,000, the respondent has agreed to a censure.