According to FINRA, Penserra Securities, LLC was censured and fined $40,000 for sending trade confirmations to customers that failed to accurately disclose whether the price shown was an average price.

The firm sent approximately 38,000 trade confirmations that were inaccurate because they failed to disclose that the price identified was, in fact, an average price. These inaccuracies related to trades the firm executed for certain institutional customers who requested that the firm combine price information from multiple partial executions into an average price on the resulting confirmations. SEC rules require that when a confirmation shows an average price, this must be clearly disclosed.

Additionally, approximately 3,000 trade confirmations the firm issued in connection with single-execution, single-price transactions were inaccurate because they contained an average price disclosure when no averaging had occurred. This suggested multiple executions when there was only one, which is also misleading.

These inaccuracies were limited to trade confirmations generated by one business unit at the firm and resulted from outdated blotter codes embedded in a legacy order management system used to execute transactions through that specific unit. While the root cause was a technical issue, the firm's supervisory failures allowed the problem to persist.

Penserra failed to reasonably supervise trade confirmation requirements for compliance. The firm's written procedures failed to provide details on the processes, parameters, and documentation required when reviewing trade confirmations for accuracy. The procedures also failed to specify the frequency of reviews. Further, the procedures did not require reviews sufficiently broad in scope to identify potential errors in reporting both single-execution and multiple-execution trades across the firm's different platforms.

Trade confirmations serve critical functions for investors. They provide official documentation of transactions and must accurately reflect key details including price, quantity, and whether averaging occurred. Inaccurate confirmations can make it difficult for customers to properly track their transactions, reconcile accounts, and verify that trades were executed as expected.

After FINRA notified the firm of these issues, Penserra revised its supervisory system and procedures. The firm instituted new order entry procedures, adopted more detailed written procedures, and provided staff training to prevent future violations. This case illustrates the importance of firms maintaining current systems and conducting comprehensive supervisory reviews across all business units and platforms.