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Regulatory Sanctions

FINRA Finds Enough Trade Reporting Violations at TD Ameritrade to Cover Costs of Staff Visit

May 25, 2017

Here’s one Trading and Financial Compliance Exam that yielded relatively nominal findings – generating a Win-Win for the regulators and the broker-dealer.


TD Ameritrade agreed to pay a $30K fine and to revise its WSPs to settle FINRA charges that on at least 23 occasions, the firm inaccurately reported that transactions executed as a single price execution were executed at an average price. FINRA also noted several other errors related to OATS reporting.


BACKGROUND.    The Omaha, NB-based firm has been a FINRA member since1979. It has no relevant disciplinary history.


FINRA FINDINGS.    In connection with a Trading and Financial Compliance Exam ("TFCE"), Market Reg staff reviewed TD Ameritrade’s compliance with various trading and supervision requirements for 1/14/15 and 1/15/15. As it pertained to the firm’s issuance of trade confirmations to customers, FINRA noted:


  • In least 23 instances, the firm inaccurately provided confirmations to its customers that transactions executed as a single price execution were executed at an average price. Such actions would constitute violations of SEC Rule 10b-10 and FINRA Rule 2010.


FINANCIALISH TAKE AWAYS.    On the one hand, the nature and number of errors trade confirmation errors are not cause for any major concerns. However, taken with several OATS reporting issues, FINRA was able to cobble together enough so-called violations to extract $30K from TD Ameritrade.


On the other hand, FINRA’s review period covered a 2-day period, which when extrapolated to a 20-day month, the context might take on a larger dimension. But of course, we do not have any information as to how many confirmations were issued by TD Ameritrade during the review period.


And so, at the end of the day, it would seem that FINRA managed to cobble together enough trading violations to warrant a $30,000 fine, which covers in large part its staff’s salaries.


All in all, a win-win, because nothing hugely relevant was found.


This case was reported in FINRA Disciplinary Actions for May 2017.

For details on this case, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2015044129801.