← Broker database 2026-03-17
Alpaca Securities Fined $300,000 for Untimely Trade Reporting and Inaccurate Trade Data
According to FINRA, Alpaca Securities LLC (CRD #288202) of New York, New York, was censured and fined $300,000 after FINRA found the firm failed to timely report approximately 1.87 million transactions and submitted more than 2 million inaccurate trade reports to FINRA trade reporting facilities.
The firm's trade reporting systems lacked sufficient processing capacity to handle spikes in trade volume, particularly at or shortly after market open and during other periods of high order activity. When these spikes occurred, the backlog caused untimely reporting on a massive scale. While the firm made enhancements to its trade reporting technology, those improvements were not sufficient to prevent further delays when trade volume increased even more.
In addition to late reporting, the firm submitted over 2 million inaccurate trade reports to the FINRA/Nasdaq Trade Reporting Facility (FNTRF) and the Over-the-Counter Reporting Facility (ORF). More than 6,700 transactions were reported with inaccurate execution quantities, and approximately 2.2 million transactions omitted the required prior reference price modifier and corresponding prior reference time — information essential to understanding how a trade price related to a prior transaction.
FINRA also found that the firm failed to establish and maintain a supervisory system, including WSPs, reasonably designed to achieve compliance with trade reporting rules.
Accurate and timely trade reporting is fundamental to market transparency and price discovery. Trade reports form the backbone of the publicly displayed tape that investors rely on to understand where and at what prices securities are trading. When large volumes of trades are reported late or with inaccurate data, the integrity of that tape is compromised, potentially affecting the execution quality received by investors. Firms experiencing rapid growth in trading volume — particularly technology-driven brokerage platforms — must ensure their infrastructure keeps pace with that growth. Compliance is not a problem that can be deferred until after scaling up.
Investors using technology-first brokerage platforms should be aware that the regulatory obligations of those platforms are the same as for traditional broker-dealers, and that execution quality and reporting accuracy are required regardless of business model.