TAG | OATs failure by E*Trade
Comments off · Posted by Securities Lawyer in FINRA
The following information is from FINRA’s website under “Disciplinary Actions, April, 2012:”
E*Trade Capital Markets LLC (CRD #111528, Chicago, Illinois)
submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured, fined $45,000, required to pay $812.13, plus interest, in restitution to customers and to revise its WSPs regarding trade reporting. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that in transactions for or with a customer, it failed to use reasonable diligence to ascertain the best inter-dealer market and failed to buy or sell in such market so that the resultant price to its customer was as favorable as possible under prevailing market conditions.
These findings stated that the firm failed to submit the market on open special handling code to OATS, and in one instance also failed to submit a new order report to OATS; failed to submit OATS information for proprietary orders not related to the firm’s market-making activity; failed to submit route reports; and improperly submitted execution reports to OATS, and in one instance submitted an inaccurate cancellation time. The findings also stated that the firm’s supervisory system for its Dempsey Unit Trading Desk did not provide for supervision reasonably designed to achieve compliance with applicable laws, regulations and FINRA rules concerning trade reporting (reporting trades accurately and timely, and the proper use of trade modifiers).
These findings also included that the firm failed to provide documentary evidence that on the trade dates reviewed, it performed the supervisory reviews for its market-making desk set forth in its WSPs concerning trading and/or quoting during a trading halt. FINRA found that the firm transmitted trade reports for odd-lot trades and failed to report the transactions with the required odd-lot modifier of .RO to the NASD®/NASDAQ Trade Reporting Facility (NNTRF).
(FINRA Case #2008013636701)
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