BROWSE BY TOPIC
Stories of Interest
- Wells Fargo Has Shown Us Its Contemptible Values
- UBS to Counter Trading Troubles With M&A Work
- SEC Moves Quickly To Shut Down Fake Pre-IPO Share Scam
- SEC Testimony: Oversight of the SEC Division of Enforcement
- FINRA Modifies 'Agency Debt Security' in Rule 6710
- Is Jamie Dimon Doing a U-Turn on Bitcoin?
- After New Yorker's Racist Rant Goes Viral, His Law Firm Gets Pummeled with 1-Star Yelp Reviews
- Bill O’Donnell is New CFO at MetLife
- Trump Still Owes Deutsche Bank, Others as Much as $480Mn
- Wells Fargo Scandals Hurt Its Retirement Business
- Michigan State to Pay $500Mn to Victims of Larry Nassar's Abuse
- Top Lawyer at Novartis Leaving Over $1.2Mn Contract with Michael Cohen's Consulting Firm
- Cadwalader Adds Mark Chorazak to its Financial Regulation Practice
- Deutsche Bank: It's A Short According to Eisman of ‘The Big Short’ Fame
- Up In Smoke: Bank of Montreal Goes All-In on Pot Deals
- RBS to Pay $4.9Bn to Settle Toxic MBS Probe with U.S.
- Apple and Goldman Sachs Team Up to Release New Credit Card
- Robinhood, A Stock, Trading App Rejected by 75 Investors, Now Worth $5.6Bn
- Wells Fargo Reportedly Pocketed Fire And Police Department Pension Fund Fee Rebates
- Trading App Robinhood Surpasses E*Trade In User Numbers
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
Electronic Brokerage Records - Opening Another Can of WORMS
by Howard Haykin
Virtu Financial Capital Markets agreed to pay a $175K fine to settle FINRA charges that it failed to maintain electronic brokerage records related to millions of market-making transactions in ”write one, read many” (WORM) format. A lower fine was imposed after considering, among other things, the firm’s revenue and financial resources.
FINRA FINDINGS. Virtu, a New York, NY-based FINRA member firm since 1999, has some 46 registered reps who operate out of 3 branch offices. In early 2012, Virtu began transitioning from a WORM-compliant electronic system for storing its electronic brokerage records to a new electronic storage system. Unfortunately, the Firm encountered difficulties during the transition to the new storage system and numerous violations and deficiencies cropped up over the next 4 years:
► Failed to Retain Electronic Records in WORM Format. As a result of difficulties during the transition, the firm failed to maintain in WORM format electronic brokerage records related to approximately 46 million market-making transactions. The problem was remediated in May 2016.
► Failed to Provide 90-day Notice to FINRA Prior to Using Electronic Storage Media. In violation of Exchange Act Rule 17a-4(f)(2)(i), the firm didn’t notify its DEA prior to retaining a vendor to provide electronic storage.
► Failed to Implement an Audit System Regarding the Inputting of Records in Electronic Storage Media.
► Failed to Obtain an Attestation from its Third-Party Vendor. The firm failed to obtain an attestation from its 3rd-party vendor that it will supply electronically stored records to regulatory authorities in the event the Firm is unable to provide the electronically stored records.
► Virtu’s Supervisory System was not Reasonably Designed.
This case addressed in this article was reported in FINRA Disciplinary Actions for November 2017.
For details on this case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2016051831201.