FINRA fines firm $65,000 for time of trade failures
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The Financial Industry Regulatory Authority has fined Philadelphia-based broker-dealer Janney Montgomery Scott $65,000 for reporting inaccurate times of trade on 391 municipal securities transactions, violating Municipal Securities Rulemaking Board Rules G-14 on time of trade and G-27 on supervision.
Without admitting or denying the findings, the firm agreed to a censure and a total fine of $150,000, of which $65,000 is for the MSRB rule violations.
The transactions took place between July 2019 and May 2021, where Janney failed to list the correct “special condition indicator,” when reporting trades, which for List Offering Price/Takedown transactions, is M020.
“For all such transactions, Janney failed to append the M020 indicator when reporting List Offering Price and Takedown transactions,” FINRA said. “As a result, Janney’s systems incorrectly reported the time of trade as the time it entered the transactions into its trade reporting system.”
During a separate period from March 2022 to March 2023, the firm also failed to report 1,085 transactions to TRACE, of which 944 were primary market corporate bond transactions. According to FINRA, those transactions took place because “the firm failed to correct or re-report certain transactions that were initially rejected by TRACE,” as well as “in certain instances, the firm’s system did not identify certain securities as TRACE-eligible securities, and as a result, Janney did not report trades in those securities to TRACE.”
Janney also reported to TRACE 75 transactions which were not reportable, violating FINRA Rules 6730(a)(6) and 2010, and submitted 50 inaccurate reports, consisting of 18 inaccurate trade prices, 15 inaccurate trade quantities, 11 instances of inaccurate trade execution times, four instances of reporting inaccurate trade quantity and trade price, one instance of an inaccurate trade execution time and trade settlement date and one instance of an inaccurate trade date.
The firm also submitted 30,000 TRACE reports missing the required No Remuneration indicator, due to a programming error, FINRA said.
FINRA accuses the firm of violating MSRB Rule G-27 on supervision for failing to catch all of those violations. Between 2021 and 2023, the firm has updated its written supervisory procedures and has hired an independent consultant “to provide surveillance and to identify deficiencies associated with Janney’s trade reporting program,” FINRA said.
The firm did not respond to requests for comment.
