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ARTICLE · 11 FEBRUARY 2020

Firm Settles FINRA Charges For OTC Equity Securities And TRACE Violations

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An institutional brokerage firm settled FINRA charges for violating OTC trading rules and Trade Reporting and Compliance Engine Reporting ("TRACE") violations.

United StatesFinance and Banking
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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An institutional brokerage firm settled FINRA charges for violating OTC trading rules and Trade Reporting and Compliance Engine Reporting ("TRACE") violations.

According to FINRA, the firm (i) failed to implement procedures to prevent locking or crossing bids in OTC Equity Securities and (ii) improperly delayed in displaying or executing certain customer limit orders. FINRA also found that the firm provided an inaccurate contra-capacity code to the FINRA/Nasdaq Trade Reporting Facility when reporting 1,062,828 last-sale reports of transactions in the National Market System Equity Securities.

In addition, with respect to TRACE Eligible Securities, FINRA charged that the firm failed to (i) report certain of its transactions in a timely manner, (ii) accurately report the correct time of 231 executions and (iii) supervise transactions.

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