As part of settlements with the Financial Industry Regulatory Authority and Securities and Exchange Commission, broker-dealer SG Americas has agreed to pay $3.1 million in fines for providing inaccurate and incomplete securities trading information, known as “blue sheet data,” the regulators announced separately on Wednesday.
Without admitting or denying the findings, the New York-based subsidiary of Paris, France-based financial services firm Societe Generale, signed a letter of acceptance, waiver and consent in which it agreed to pay $3.1 million in fines. Half will be paid to FINRA and half to the SEC, as part of a separate SEC order.
The SEC alleged that SG Americas made many deficient blue sheet submissions with missing or inaccurate data, largely because of undetected coding errors. These problems involved about 27.6 million transactions, which demonstrated that the BD had inadequate processes in place to validate the accuracy of its submissions.
From Jan. 1, 2014 through July 31, 2019, SG Americas made 16,442 Electronic Blue Sheets submissions to the SEC — 13,656 of which contained deficient trade data, according to the order. The SEC also asked the firm to cease and desist from committing or causing any further violations of the Securities Exchange Act of 1934.
In addition, the firm agreed to certify, within 90 days of the settlement with FINRA, that it has conducted a comprehensive review and revised its systems and procedures related to the deficiency.
Role of Blue Sheets
FINRA and the SEC regularly request blue sheets to assist in the investigation of market manipulation and insider trading. The process provides “regulators with critical detailed information about securities transactions, including the security, trade date, price, share quantity, customer name, and whether it was a buy, sale or short sale,” according to FINRA.