B/D News & Products

There’s a new rate for fees paid under Section 31 of the Exchange Act. The Securities and Exchange Commission‘s regular appropriation has been enacted and, effective January 25, 2008, the Section 31 rate applicable to securities transactions will decrease from $15.30 per $1 million to $11.00 per $1 million. The SEC is required to adjust the filing and securities transaction fee rates on an annual basis, after consultation with the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB). The SEC will announce the new fee rates for fiscal year 2009 no later than April 30, 2008. In addition, the SEC may be required to make a mid-year adjustment to the Section 31 fee rate for 2008, after consultation with CBO and OMB, which would be announced no later than March 1, 2008, and effective April 1, 2008…

The Financial Industry Regulatory Authority (FINRA) has fined 19 broker/dealers a total of $2.8 million for “substantially overstating their advertised trade volume to three private service providers.” FINRA compared the firms’ advertised trade volume in selected securities with the firms’ executed trade volume for the same securities in August 2006 and found substantial overstatements for each firm in one or more of the securities reviewed. FINRA also found that, prior to September 2006, all of the firms lacked an adequate supervisory system and procedures for communicating trade volume to such services. Eight firms were fined $200,000 each (Broadpoint Capital; CIBC World Markets Corp; Lehman Brothers; Merrill Lynch; Needham & Company; Baird & Co; Thomas Weisel Partners, and UBS Securities). Six firms were fined $150,000 each (Bear, Stearns; BMO Capital Markets Corp.; Cowen and Company; Deutsche Bank Securities; Leerink Swann & Company; and RBC Capital Markets Corp.). Four firms were fined $50,000 each (Friedman, Billings, Ramsey; Jefferies & Company; JMP Securities; and Pacific Crest Securities, Inc.). The fine for one firm, Piper Jaffray, was reduced to $100,000 because the firm conducted its own extensive internal investigation and then voluntarily provided the results to FINRA.