FINRA fines firm $60,000 for reporting failures
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New York-based Odeon Capital has agreed to pay a $60,000 fine to settle Financial Industry Regulatory Authority charges that the firm failed to report 225 municipal securities transactions in a timely manner and incorrectly reported 3,250 internal firm transfers that were not reportable to the Municipal Securities Rulemaking Board’s Real-Time Transaction Reporting System.
Finra found that the firm violated MSRB Rule G-14 on transaction reporting as well as MSRB Rule G-27 on supervisory requirements on both violations, though the firm neither admits nor denies the findings. The fine also comes with a censure and the firm is glad to be putting the matter behind it.
“We take our reporting obligations seriously and are pleased to have resolved these matters with FINRA,” said Chistopher Tolla, chief compliance officer and chief information officer for Odeon Capital Group.
The matter arose between February 2017 and August 2019, when the 225 municipal securities transactions, or 3% of the firm’s total reporting obligations for its municipal securities business were submitted late due to manual errors and failures to submit amendments in a timely manner, FINRA said.
The 3,250 internal firm transfers occurred between February 2017 and March 2021 as well as between January 2022 and August 2022, representing 6% of the firm’s total reports of municipal securities transactions.
“The firm mistakenly submitted the internal transfers because it mistakenly believed they were reportable to the RTRS,” FINRA said.
In addition to violating MSRB Rule G-14 on transaction reporting for those transactions, Odeon also violated the MSRB Rule G-27 on supervisory requirements for not having written supervisory procedures reasonably designed to be in compliance with MSRB rules and federal securities laws.
Specifically, the firm did not have any written procedures to explain how supervisors should conduct reviews for timely reporting or when and how reporting issues should be escalated, and failed to explain how supervisors should conduct reviews to ensure that the firm’s transfers were not reported to RTRS or TRACE.
The current timeframe for reporting transactions to RTRS is 15 minutes, which will be changing soon to one minute amidst industry backlash.
In addition to the $60,000 the firm paid to settle the MSRB violations, it also paid $40,000 for failing to report 640 TRACE-eligible securitized product transactions.
