In its December report, the Financial Industry Regulatory Authority listed the companies it has penalized for cases of misconduct and violation of rules.
On Oct. 17, FINRA imposed a $2.9 million fine on RBC Capital Markets LLC. The regulator found that the company failed to establish and maintain a satisfactory supervisory system governing the delivery of prospectuses for exchange-traded funds, exchange-traded notes and mutual funds. FINRA said RBC Capital also failed to enforce its written supervisory procedures.
According to FINRA, RBC Capital's ETF and ETN prospectus delivery process relied on the manual inputting of coding for individual securities into third-party software, which would trigger the delivery of a prospectus when a client purchased a security.
RBC Capital had a single employee manually assign trailer codes to ETFs and ETNs on a security-by-security basis, and there were no supervisory systems in place to monitor the employee's performance. As a result, the employee inadvertently caused the system to overwrite the trailer codes that triggered prospectus delivery and failed to identify new funds and notes requiring trailer codes.
The company also failed to properly address the matter, FINRA said. The company did not admit or deny FINRA's findings.
On Oct. 3, FINRA imposed a $150,000 fine on ABN AMRO Clearing Chicago LLC. The regulator found that the company understated the portfolio margin requirements for accounts by millions of dollars. ABN AMRO mistakenly categorized the over the-counter traded equities at issue as margin-eligible because of an incorrect definition of margin-eligible securities used by the company. The company did not admit or deny FINRA's findings.
On Oct. 15, Apex Clearing Corp. was fined $140,000 for failing to comply with FINRA's short interest reporting requirements and related supervision obligations. The company excluded certain short interest positions from its submissions to the regulator. FINRA said Apex Clearing failed to establish and maintain a sufficient supervisory system to achieve compliance with its reporting obligations. The company did not admit or deny FINRA's findings.