← Broker database 2025-10-23
Puente Servicios Financieros Fined $20,000 for Mark-Up Disclosure Failures
According to FINRA, Puente Servicios Financieros LLC was censured and fined $20,000 for failing to disclose required mark-up and mark-down information on retail customer confirmations.
FINRA Rule 2232 requires that retail customer confirmations for fixed-income transactions disclose the total dollar amount and percentage of the prevailing market price for any mark-ups and mark-downs charged by the firm. This disclosure requirement helps investors understand the true cost of their transactions.
The firm's confirmations failed to include both the total dollar amount and percentage disclosures required under the rule. The disclosure failures stemmed from a coding issue in the firm's systems.
Compounding the problem, the firm had no supervisory system in place to catch these errors. Puente had no policies or procedures regarding supervisory reviews of disclosures on retail customer confirmations and did not conduct any reviews of retail customer confirmations to ensure they included the required mark-up and mark-down disclosures.
Mark-ups and mark-downs represent the difference between the price a dealer pays for a security and the price at which it sells that security to a customer. These charges are a significant component of transaction costs and can meaningfully impact investment returns, particularly for fixed-income investors who may engage in frequent trading.
For investors, this case underscores the importance of reviewing trade confirmations carefully. Confirmations should show you the mark-up or mark-down applied to your transaction. If this information is missing or unclear, you should contact your broker for clarification.
Understanding transaction costs is essential to evaluating investment performance. Even seemingly small mark-ups can compound over time and significantly reduce returns. Investors should compare costs across different brokers and consider whether the services provided justify the fees charged.