NEW YORK (Reuters) - Wall Street’s self-funded watchdog fined a unit of Barclays PLC $800,000 for violations related to how the bank reported stock trades over a more than two-year period, hampering the regulator’s ability to properly monitor the market.
The Financial Industry Regulatory Authority said late Wednesday that Barclays Capital did not properly update its electronic systems to comply with regulations from August 2009 that required that executing brokers report trades, as well as the name of the executing parties of the trades, to FINRA.
As a result, between Aug. 3, 2009 and Dec. 11, 2012, Barclays failed to identify the correct executing party on around 90 million reports with other broker dealers that were sent to FINRA’s trade reporting facility.
“Reporting inaccurate data to FINRA impacts the integrity of FINRA’s audit trail and the ability of regulators to conduct appropriate surveillance of member firm’s trading activity,” the regulator said.
Barclays consented to the fine without admitting or denying the allegations, and declined comment. The bank was fined $10,000 by FINRA in December 2010 for equity trade reporting violations stemming from November 2008.
Like most big banks, Barclays operates it own in-house electronic trading venue, known as a “dark pool,” where other brokers can send stock orders to be executed rather than sending them to a stock exchange where they might be charged higher fees and others may see the orders and bet against them.
New York’s attorney general in June 2014 accused Barclays of fraud over how it operated within its dark pool, saying it misled investors to boost its own profits. Barclays has denied any wrongdoing and said that no investors have been harmed.
Separately, FINRA settled a case with a unit of UBS Group AG last week that opens that bank up to new scrutiny of its compliance supervision of its electronic trading platform over the next nine months.
The case stemmed from a follow-up examination from another FINRA case in which UBS paid $12 million in fines in 2011 and agreed to fix certain data reporting problems. In a follow-up examination two years later, the regulator found ongoing violations in which batches of trades entered electronically by UBS into a FINRA audit system were incomplete or inaccurate.
Reporting by John McCrank; Editing by Bill Rigby
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