According to FINRA, Stonecrest Capital Markets, Inc. has been censured and fined $45,000 for failing to properly report transactions to FINRA's Trade Reporting and Compliance Engine (TRACE).

The firm failed to report 58 transactions in TRACE-eligible securitized products, 30 transactions in corporate bonds, and eight transactions in agency debt. Although the firm initially reported these transactions, the TRACE system rejected them, and despite receiving reject messages, the firm did not re-report the transactions. These unreported transactions constituted approximately four percent of the firm's TRACE-eligible transactions during the relevant period.

Additionally, the firm submitted 35 inaccurate reports to TRACE, including 24 transactions with inaccurate capacity, six with inaccurate trade prices, four with inaccurate settlement dates, and one with inaccurate transaction size and trade date.

FINRA also found the firm's supervisory system was not reasonably designed to achieve compliance with TRACE reporting rules. The firm failed to reasonably investigate red flags relating to its TRACE reporting, and its written supervisory procedures did not provide guidance on how supervisors should review TRACE reporting for timeliness or accuracy.

What Investors Can Learn: TRACE reporting provides transparency in the fixed-income markets by making transaction information publicly available. This transparency helps investors receive fair prices. When firms fail to report accurately, it undermines market integrity and price discovery.