According to FINRA, BofA Securities, Inc. was censured and fined $90,080 for filing untimely and inaccurate restricted period and trading notifications with FINRA under Rule 5190.

The firm's inaccurate notifications either failed to identify all distribution participants in the distributions or failed to properly identify distribution participants as FINRA members. BofA Securities submitted restricted period notifications without verifying that the list of final participants was correct and failed to file amended notifications when distribution participants joined after an initial restricted period notification was filed. Instead of filing amendments, the firm supplied the list of final participants only in the trading notification.

FINRA also found that BofA Securities failed to establish and maintain a supervisory system reasonably designed to achieve compliance with FINRA Rule 5190 notification requirements regarding timeliness and accuracy. The firm lacked a reasonable supervisory system to ensure that restricted period notifications were timely filed for certain distributions with marketing periods shorter than the length of the applicable restricted periods. Instead, the firm relied on internal "launch emails" to determine when to file notifications. The firm's written supervisory procedures did not provide sufficient guidance on when notifications needed to be submitted or how they should be reviewed. BofA Securities also lacked any supervisory system to review the accuracy of notifications, including any system for reviewing whether distribution participants were FINRA members, and lacked reasonable systems to verify that it filed amended notifications reflecting additions of distribution participants.

Regulation M's restricted period and notification requirements are designed to prevent market manipulation during securities distributions by restricting certain trading activities. Accurate and timely notifications enable FINRA to effectively monitor compliance with these restrictions and protect market integrity. When firms fail to properly identify all distribution participants or file timely notifications, it undermines the regulatory framework designed to ensure fair and orderly markets during distributions. This case demonstrates that even routine regulatory filings require adequate supervisory attention and controls.