A broker-dealer settled FINRA charges for misreporting short positions in equity securities from March 31, 2016 to October 14, 2016.
According to FINRA, the broker-dealer violated FINRA Rule 4560 ("Short-Interest Reporting") by overstating its short positions when it reported 1,911 short positions totaling 23,640,682 when it should have reported only 1,704 short positions totaling 21,157,936 shares. FINRA Rule 4560 requires firms to maintain and periodically report - twice per month, as required by FINRA - information on short positions in all of a broker-dealer's customer and proprietary accounts that have settled, or have reached a settlement date, as of the close of the relevant reporting settlement date.
To settle the charges, the broker-dealer agreed to a (i) censure and (ii) $90,000 fine.
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