FINRA fines New York City-based firm $28,800 for alleged MSRB rule violations

Odeon Capital Group agreed to pay $28,800 to settle Financial Industry Regulatory Authority allegations that the firm violated municipal securities rules by failing to disclose required mark-up or mark-down information and failing to maintain an adequate supervisory system.

The settlement was part of a wider disciplinary action against the firm by FINRA, which also alleged certain FINRA rule violations  Odeon, a New York City-based investment banking firm and broker-dealer, consented to FINRA’s findings without admitting or denying them, a settlement document accepted by FINRA on Aug. 6 shows. 

The $28,800 fine pertaining to violations of Municipal Securities Rulemaking Board rules was part of a $75,000 total fine imposed by FINRA. Odeon also consented to other sanctions, including a censure. 

Between December 2019 and December 2021, the firm provided non-institutional customers with confirmations that didn’t disclose required mark-up or mark-down information for 516 municipal bond transactions, FINRA found. 

“The firm alerted its clearing firm in April 2020 to an ongoing data feed issue, but the deficient disclosures continued until December 2021,” the settlement document said. “Therefore, Odeon violated MSRB Rule G-15.”  

In addition, between December 2019 and July 2022, the firm’s supervisory system was not reasonably designed to achieve compliance with certain disclosure requirements in MSRB Rule G-15, the document said. 

Odeon’s written supervisory procedures during that period acknowledged that MSRB Rule G-15 requires mark-up and mark-down disclosures, “but did not provide a process for supervisory review of customer confirmations to ensure that the required markup and markdown disclosures were made,” the document said.

“With respect to MSRB Rule G-15, the WSPs stated generally that the firm would review customer accounts for compliance with the rule but contained no procedures that explained how to review mark-up and mark-down information, the frequency of the reviews, and the method by which the reviews should be documented,” the document said. 

Through its failure to establish and maintain a supervisory system – including written supervisory procedures – that were reasonably designed to achieve compliance with MSRB Rule G-15, Odeon violated MSRB Rule G-27, according to the settlement document. 

Odeon did not respond to a phone call Thursday seeking comment.