Among recent enforcement actions, the Securities and Exchange Commisison fined Citigroup $7 million for providing incomplete blue sheet information.
The Financial Industry Regulatory Authority, meanwhile, censured and fined BNP Paribas on overstated trade volumes; Goldman Sachs, in two separate cases, on reporting errors and transaction errors; and IFC Holdings on unit investment trust violations.
SEC Fines Citigroup Over Blue Sheets
Citigroup has agreed to pay a $7 million fine and admit wrongdoing on SEC charges that a computer coding error caused the firm to provide the agency with incomplete blue sheet information about trades it executed.
According to the agency, the coding error occurred in the software that Citigroup used from May 1999 to April 2014 to process SEC requests for blue sheet data, including the time of trades, types of trades, volume traded, prices, and other customer identifying information.
During that 15-year period, Citigroup consequently omitted 26,810 securities transactions from its responses to more than 2,300 blue sheet requests. After discovering the coding error, Citigroup failed to report the incident to the SEC or take any steps to produce the omitted data until nine months later.
“Broker-dealers have a core responsibility to promptly provide the SEC with accurate and complete trading data for us to analyze during enforcement investigations,” Robert Cohen, co-chief of the SEC Enforcement Division’s market abuse unit, said in a statement.
Cohen added, “Citigroup did not live up to that responsibility for an inexcusably long period of time, and it must pay the largest penalty to date for blue sheet violations.”
FINRA Censures, Fines BNP Paribas on Overstated Trade Volumes
FINRA has censured BNP Paribas and fined the firm $375,000 after finding that that it overstated its advertised trade volume in securities through Bloomberg.
According to the agency, the overstated trade volume resulted from a system issue that caused the firm to combine the advertised trade volume in unrelated securities that had the same trading symbol in the Canadian market and the U.S. market.
A second system error was caused by the way its customers identified common stocks and preferred stocks in the firm’s systems. This error caused the firm to inaccurately advertise volume in a common stock when the volume actually traded by the firm was in the preferred stock related to the same issuer.
FINRA also said that the firm’s supervisory system wasn’t up to ensuring compliance with requirements for accuracy in the firm’s advertising of executed trade volume.