← Broker database 2025-09-24
TD Ameritrade Firms Fined $550,000 for Trade Reporting Failures
According to FINRA, TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. were censured and fined a combined $550,000 for failing to report and untimely reporting millions of trades to FINRA reporting facilities.
The Omaha, Nebraska-based firms, which have since been acquired by Charles Schwab & Co., failed to report transactions to the FINRA/Nasdaq Trade Reporting Facility (FNTRF) and Over-the-Counter Reporting Facility (ORF). The firms did not appreciate they had an obligation to report certain fractional share and error correction transactions, and consequently did not pay the Section 31 regulatory transaction fees associated with these trades.
Additionally, the firms failed to transmit transactions in national market system (NMS) securities to the FNTRF within 10 seconds after execution, and TD Ameritrade Clearing failed to transmit transactions in OTC Equity securities to the ORF within the required timeframe.
TD Ameritrade Clearing also failed to report positions to the Large Options Positions Reporting (LOPR) system. The firm failed to report equity and index options position changes to LOPR when positions were added, modified, or deleted on the expiration date of the option, and also failed to report certain accounts acting in concert due to a system update designed to increase processing speed.
FINRA found that the firms failed to establish a supervisory system reasonably designed to achieve compliance with reporting rules. Neither firm had written supervisory procedures concerning the reporting of fractional share trades or error correction transactions.
The firms ultimately self-reported both issues and implemented remedial measures, and the reporting failures were resolved by system modifications.
This case underscores the importance of accurate and timely trade reporting, even for seemingly minor transaction types like fractional shares. Investors should understand that trade reporting requirements help maintain market transparency and regulatory oversight.