FINRA Imposes $325,000 Fine on BofA Securities

Financial Industry Regulatory Authority (FINRA) recently announced that it has imposed a penalty worth $325,000 on Bank of America Securities (BofAS) for publishing inaccurate monthly reports of order execution. The authority noted that the New York-headquartered financial firm published 107 such reports.

Bank of America Securities, which has been a member of FINRA since 2018, violated NASD Rule 3010 and FINRA Rules 3110 and 2010, FINRA said.

The details shared by FINRA show that between January 2014 and February 2022, BofA had two market centers, MLCO and MLIX. The company was required to report separate statistical information concerning order executions under Rule 605.

“From January 2014 through April 2021, BofAS published statistical information concerning order executions for MLCO and MLIX together on its publicly available Rule 605 monthly reports for MLCO rather than in separate reports for each market center and classified MLIX executions as 'away executed shares' in that report. Further, as a result of the combined report, the firm inaccurately categorized certain mid-point peg immediate or cancel,” FINRA noted.

FINRA Actions

In the past few months, FINRA fined several financial firms for rule violations. In June 2022, the authority imposed a penalty worth $9 million on National Securities Corp for market violations. In March 2022, Crown Capital faced a penalty worth $75,000 from FINRA.

While providing details about the latest fine imposed on BofAS, FINRA added: “Moreover, from January 2014 through February 2022, various technological issues caused the firm to publish inaccurate Rule 605 reports for MLCO. First, from January 2014 through April 2021, the firm misclassified orders based on inaccurate order quantities that did not reflect a reduction for prior executions. In total, from January 2014 through February 2022, the firm published 98 inaccurate monthly Rule 605 reports of order executions by MLCO and nine inaccurate monthly Rule 605 reports of order executions by MLIX, for a total of 107 inaccurate Rule 605 reports,” FINRA added.