Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Regulation and Compliance > Federal Regulation > SEC

Natixis, Citadel Securities, MUFG to Pay SEC More Than $6M for Blue Sheet Data Errors

By Melanie Waddell

X
Your article was successfully shared with the contacts you provided.

Three broker-dealers — Citadel Securities, Natixis Securities Americas and MUFG Securities Americas Inc. — agreed Monday to pay the Securities and Exchange Commission more than $6 million for providing incomplete and inaccurate securities trading information via blue sheet data.

The SEC uses the blue sheet data to carry out its enforcement and regulatory obligations, including investigating insider trading and other fraudulent activity.

The firms admitted the findings in the SEC’s cease-and-desist orders and agreed to be censured and to pay penalties of $3.5 million for Citadel, $1.25 million for Natixis, and $1.4 million for MUFG.

According to the SEC’s orders, over a period of several years, Citadel, Natixis and MUFG Securities Americas each made numerous deficient blue sheet submissions containing inaccurate or missing data; incorrect order execution times that failed to adjust for time zone changes; and incorrect or missing exchange codes, transaction type identifiers, opposing broker number and contra-party identifiers.

Citadel, the largest provider of blue sheet data of the firms charged today, submitted incorrect data for nearly 80 million trades while Natixis and MUFG submitted incorrect data for approximately 150,000 trades and 650,000 trades, respectively, the SEC states.

“These deficiencies largely stemmed from undetected coding errors,” the SEC said, adding that “none of the firms had adequate processes designed to validate the accuracy of its submissions.”

Kelly Gibson, associate regional director of the SEC’s Philadelphia Regional Office, said that the securities regulator routinely use blue sheet data “to detect wrongdoing and protect Main Street investors through our enforcement efforts. Firms must be diligent and take seriously their obligations to provide accurate and complete data in response to our requests.”

Each of the firms has engaged in remedial efforts to address the causes for the deficient submissions, including the retention of an outside consultant and the adoption of new policies and procedures for processing blue sheet requests, the orders state.

The SEC’s orders also found that Citadel, Natixis and MUFG willfully violated the broker-dealer books and records and reporting provisions.

— Check out SEC Uses Data Analysis to Bust Cherry-Picking Broker: Enforcement on ThinkAdvisor.

Melanie Waddell

@Think_MelanieW

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.