The Financial Industry Regulatory Authority (FINRA) recently announced it has censured and fined Barclays Capital Inc.; Goldman, Sachs & Co.; and Merrill Lynch, Pierce, Fenner & Smith, Inc., $1 million each for failing to provide complete and accurate information about trades performed by the firms and their customers, commonly known as “blue sheet” data, to FINRA, the SEC and other regulators.
Blue sheets provide regulators with detailed information about trades performed by a firm and its customers, including the security’s name, date traded, price, transaction size and parties involved. Regulators use the data to identify trading anomalies and investigate potential insider trading or other market manipulations. Federal securities laws and FINRA rules require firms to provide this information to FINRA and other regulators electronically upon request.
FINRA found the firms’ violations included submissions that failed to include some customer names and contact information, failed to include some transactions, contained incorrect name and contact information for some customers, or contained inaccurate details of the transactions. The violations arose from problems with the firms’ electronic systems used to compile and produce blue sheet data. FINRA also found that the firms failed to have in place adequate audit systems providing for accountability of their blue sheet submissions. FINRA ordered the firms to certify that they have conducted a comprehensive review of their systems related to blue sheet submissions, and to certify that they have established procedures reasonably designed to address and correct the violations.
According to the notice, each firm purportedly has a prior regulatory history involving the submission of inaccurate blue sheet data.
In settling these matters, Barclays, Goldman Sachs and Merrill Lynch neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
The foregoing information, which is publicly available on FINRA’s website, is being provided by The White Law Group. The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For a free consultation with a securities attorney, please call the firm at 312/238-9650. For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.