FINRA member fined for recording inaccurate trading order details

The Case

The firm failed to establish and maintain a supervisory system, including WSPs, reasonably designed to supervise the accuracy of order times on its order memoranda. As a result, the firm listed inaccurate order receipts and/or transmission times on 30 percent of the order memoranda for customers’ option orders.

The action also highlights that the firm failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs) designed to oversee the accuracy of order memoranda, including order receipt and transmission times. 

Why Does This Matter?

The enforcement action highlights the importance of establishing and maintaining a supervisory system to ensure regulatory compliance.  

InnReg's Experience

InnReg has over a decade of experience developing effective supervisory frameworks for fintechs based on a systematic approach to identifying risks, implementing effective controls, and enhancing internal documentation to reduce regulatory burdens. InnReg’s compliance consulting services empower fintechs to enhance policies, processes, and technologies for e-communications compliance.

Learn More About This Topic

For additional details, read how InnReg’s Fintech Compliance checklist can help your fintech build best practices to meet evolving regulatory requirements. InnReg’s framework includes an end-to-end guide for reviewing and testing a supervisory system, conducting business reviews, and testing.