Tullett Prebon Charged with Multiple US Compliance Lapses

The National Futures Association (NFA) has charged Tullett Prebon Financial Services, an Introducing Broker, for multiple possible violations of its compliance rules, the self-regulatory body announced last week.

The official complaint detailed that the Introducing Broker did not keep voice recordings of telephone calls associated with a block trade which was brokered by two TPFS APs on both the Buy-Side Buy-Side The buy-side is comprised of firms in the financial industry that purchase securities and are accompanied by account investment managers, pension funds, and hedge funds.The buy-side is composed of those that buy and invest large sums of securities with the intention of generating a lucrative return or have their funds managed. The Buy-Side ExplainedIn terms of Wall Street, the buy-side includes investment institutions that purchase securities, stocks, or other financial instruments with the aim The buy-side is comprised of firms in the financial industry that purchase securities and are accompanied by account investment managers, pension funds, and hedge funds.The buy-side is composed of those that buy and invest large sums of securities with the intention of generating a lucrative return or have their funds managed. The Buy-Side ExplainedIn terms of Wall Street, the buy-side includes investment institutions that purchase securities, stocks, or other financial instruments with the aim Read this Term and Sell-Side Sell-Side Those in the financial industry involved with the production, marketing, and the sale of bonds, forex, stocks, and other financial instruments constitute the sell-side.Products and services produced by the sell-side are geared towards those who on the buy-side. You can think of the sell-side and buy-side like a coin, you cannot have one side without the other. The sell-side is comprised of individuals, firms, fintech companies, and market makers, who are responsible for providing liquidity in th Those in the financial industry involved with the production, marketing, and the sale of bonds, forex, stocks, and other financial instruments constitute the sell-side.Products and services produced by the sell-side are geared towards those who on the buy-side. You can think of the sell-side and buy-side like a coin, you cannot have one side without the other. The sell-side is comprised of individuals, firms, fintech companies, and market makers, who are responsible for providing liquidity in th Read this Term.

“TPFS was unable to produce the voice recordings NFA requested because the firm had failed to retain the voice recordings for either AP involved on January 7, 2020 block trade,” the complaint stated. Tullett Prebon did not recognize the phone recording violation until the regulatory body requested it in an examination of the firm.

Additionally, the self-regulator charged the company for failing to establish and maintain an adequate system to supervise its member employees’ recordkeeping activities and communications. This issue went undetected by the firm for around 18 months.

These companies are obligated to diligently supervise the member employees’ commodity interest activities.

“The firm also failed to detect or ignored an error on a telecommunication report the IT department utilized during the 2018 office move since the report listed the incorrect retention period of 96 hours for one of the affected APs,” the complaint added.

The Decision Is Yet to Be Made

For the two charges, Tullett Prebon is looking at expulsion or suspension from its NFA membership for a specified period. Moreover, it might be censured, along with a monetary penalty of up to $500,000 for each violation count. Additionally, the regulator can issue a cease and desist order or other penalties which might not be inconsistent with regular penalties.

Headquartered in New York, Tullett Prebon Financial Services operates as an Introducing Broker and has been an NFA member since 2003. It has around 70 registered associated persons (APs) and offers intermediary services to institutional customers.