FINRA censured and fined a financial services firm for failing to provide "complete and accurate trade data" electronically in a timely manner. Such trade data, commonly known as "blue sheets," provide information about securities transactions, including the security, trade date, price, share quantity, customer name, and whether the transactions were buys, sales or short sales.
FINRA found that from 2008 to 2015, the firm submitted thousands of blue sheets to regulators that misreported or omitted critical information on over 1 million trades. From January 2014 to August 2015, a significant number of the firm's blue-sheet submissions to regulators were untimely. FINRA determined that these problems resulted from significant failures within the firm's blue-sheet systems, which were used to compile and produce the blue-sheet data, and included both programming errors in system logic and instances in which the firm failed to implement the necessary enhancements to meet regulatory reporting requirements.
FINRA also found that the firm failed (i) to put adequate audit systems in place for providing accountability of its blue sheet submissions, and (ii) maintain any written procedures relating to blue sheets or blue-sheet validation.
In addition to agreeing to the censure and fine, the firm promised to retain an independent consultant in order to improve its policies, systems and procedures related to blue-sheet submissions.
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