WASHINGTON — The Financial Industry Regulatory Authority (FINRA) today announced it has censured and fined Macquarie Capital (USA) Inc. $2.95 million for failing to provide complete and accurate trade data in an automated format when requested by the Securities and Exchange Commission (SEC) and FINRA. Also, Macquarie must conduct a comprehensive review of its policies, systems and procedures related to blue sheet submissions, and to subsequently certify that they have established procedures reasonably designed to address and correct the violations.
The SEC and FINRA request trade data, or "blue sheets," to assist them in investigations focused on equity trading, including market manipulation and insider trading. Federal securities laws and FINRA rules require firms to provide this information to FINRA and other regulators electronically upon request. Blue sheets provide regulators with critical information about securities transactions, including the security, trade date, price, share quantity, customer name, and whether it was a buy, sale, or short sale. This information is essential to regulators' ability to discharge their enforcement and regulatory mandates.
Cameron Funkhouser, Executive Vice President and Head of FINRA's Office of Fraud Detection and Market Intelligence, said, "FINRA's ability to conduct market surveillance and complex investigations is dependent on the accuracy of member firm blue sheet data. All introducing and clearing firms should take inventory of their processes for producing accurate trading data to ensure that they are in position to comply with blue sheet requests from regulators in a complete and timely manner."
FINRA found that from January 2012 to September 2015, Macquarie experienced multiple problems with its electronic systems used to compile and produce blue sheet data. This caused the firm to submit some blue sheets that misreported buys as sells and vice versa on allocations of certain customer trades, miscalculate the net amount of transactions, fail to report post-trade cancels and corrections, and fail to provide accurate customer information. FINRA also found that Macquarie failed to have adequate audit systems in place.
In settling this matter, Macquarie neither admitted nor denied the charges, but consented to the entry of FINRA's findings.
FINRA's investigation was conducted by the Office of Fraud Detection and Market Intelligence, and the Department of Enforcement.
Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2014, members of the public used this service to conduct 18.9 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA's Disciplinary Actions Online database. Investors can also call FINRA's Securities Helpline for Seniors at (844) 57-HELPS for assistance or to raise concerns about issues they have with their brokerage accounts and investments.
FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.