← Broker database 2024-07-23
Janney Montgomery Scott Fined $150,000 for Trade Reporting Violations
According to FINRA, Janney Montgomery Scott LLC was censured and fined $150,000 on July 23, 2024, for multiple trade reporting violations involving both municipal securities and corporate bonds.
The firm failed to appropriately identify transactions in new issue securities reported to the MSRB, which caused the firm's systems to report inaccurate times of trade for those transactions. Specifically, the firm failed to append the special condition indicator when reporting List Offering Price and Takedown transactions. The firm also failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to ensure accurate reporting of these transactions.
Additionally, the firm violated TRACE reporting rules by failing to report, overreporting, or reporting inaccurately certain transactions to TRACE. The firm's written supervisory procedures failed to specify how and when the firm should review and address its exception reports for late, erroneous, or rejected trades. The firm's exception reports also failed to address common errors in reporting such as trade quantity and trade price. The firm lacked a system to identify possible overreporting and did not perform any supervisory review concerning use of the no remuneration indicator.
Following these violations, the firm undertook steps to correct its reported transactions, updated its written supervisory procedures, provided training to relevant personnel on reporting requirements, and hired an independent consultant to provide surveillance and identify deficiencies associated with its trade reporting program. Accurate trade reporting is essential for market transparency and price discovery, helping investors make informed decisions. This case emphasizes the importance of robust systems and procedures for ensuring regulatory compliance in trade reporting.