The Financial Industry Regulatory Authority disclosed disciplinary actions taken against several companies, including Merrill Lynch Pierce Fenner & Smith Inc., Simmons First Investment Group Inc., Park Avenue Securities LLC, Potamus Trading LLC and J.P. Morgan Securities LLC, for violating certain rules and regulations.
On April 6, FINRA fined Merrill Lynch Pierce Fenner & Smith $115,000 for failing to enforce policies and procedures to prevent trade-throughs of protected quotations in National Market System stocks that do not fall within any applicable exception. The regulator found that the company failed to take the necessary steps in establishing that the intermarket sweep orders it routed met the requirements.
On April 10, Simmons First Investment Group was fined $200,000 over its failure to implement an effective anti-money laundering program that could have detected suspicious transactions in a customer's accounts.
On April 11, the regulator fined Park Avenue Securities $300,000 and required it to submit a written certification that it has finished a review of its systems and procedures related to the supervision of variable annuities. FINRA found that the company's sales of variable annuities included L-share contracts and the company's procedures failed to adequately address considerations for sales of different variable annuity share classes.
On April 16, Potamus Trading was fined $100,000. The company was also instructed to revise its written supervisory procedures over findings that it transmitted reportable order events containing inaccurate, incomplete or improperly formatted data to the order audit trail system.
And on April 23, FINRA fined J.P. Morgan Securities $345,000, of which $40,000 is payable to the regulator, and required the company to revise its written supervisory procedures over findings. FINRA found that the company routed intermarket sweep orders through protected quotations multiple times and that limitations in the company's system led to a failure to retain market data snapshots from the Securities Information Processor.
The companies did not admit nor deny any of the findings.