21 August 2017
Find out more

NASD fines 18 firms for auditing violations

05 October 2004  |  4226 views  |  0 NASD

New York investment firm SG Cowen is one of 18 companies that has been censured and fined by the US National Association of Securities Dealers (NASD) for violating order auditing regulations.

Mary Schapiro, vice chairman, NASD, says the enforcement actions are against a wide range of firms for violations such as missing reports, inaccurate data and failure to correct data after it had been rejected.

The largest single action was against SG Cowen, which was fined $800,000 for failing to report OATS data for approximately 50 million orders received by its equity derivatives desk between October 1999 and March 2004.

Although SG Cowen had introduced systems for capturing and reporting OATS data in 1999, operational changes that were implemented shortly afterwards meant that data generated for the equity derivatives desk were never forwarded to NASD - even though other trading desks at the firm were regularly submitting reports.

The lack of an adequate supervisory system meant that SG Cowen did not discover the problem until late 2003. The fine imposed on the company consists of $500,000 for inadequate supervision and $300,000 for OATS violations.

The other firms that were fined for non-compliance with OATS regulations were Spear, Leeds & Kellogg, Schwab Capital Markets, Credit Suisse First Boston, Carlin Equities Corporation, FutureTrade Securities, Pulse Trading, Scottrade, Delta Asset Management Company, Deutsche Bank Securities, Doyle, Miles & Co, Quantlab Securities, BNY Brokerage, Index Securities, Mid-Atlantic Capital Corporation, Options Trading Associates, Transcend Capital and UBS Securities,

In concluding the settlements, the firms neither admitted nor denied the charges.

NASD says compliance with the OATS rules is critical to its regulation of the Nasdaq Stock Market. Companies are required to report certain information related to the handling and execution of customer orders and certain proprietary orders for Nasdaq securities.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

NASD announces crackdown on instant messaging

NASD announces crackdown on instant messaging

19 June 2003  |  4713 views  |  0 comments
UNX to direct liquidity to SuperMontage following NASD rule change

UNX to direct liquidity to SuperMontage following NASD rule change

26 February 2003  |  3745 views  |  0 comments
OM to build NASD trade quotation system

OM to build NASD trade quotation system

10 January 2002  |  3183 views  |  0 comments
NASD names Glauber and Simmons as chairmen

NASD names Glauber and Simmons as chairmen

27 July 2001  |  2273 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
visit www.niceactimize.comvisit www.dorsum.euvisit www.vasco.com

Top topics

Most viewed Most shared
Mobile contactless spending accelerating in UKMobile contactless spending accelerating i...
10978 views comments | 24 tweets | 23 linkedin
hands typing furiouslyWhy Is Risk Analytics Important?
9211 views 0 | 5 tweets | 1 linkedin
Barclays pairs banking data with third party apps for SmartBusiness DashboardBarclays pairs banking data with third par...
9135 views comments | 21 tweets | 26 linkedin
Norwegian banks and startups form fintech clusterNorwegian banks and startups form fintech...
9034 views comments | 19 tweets | 23 linkedin
RBS to bring Silicon Valley to EdinburghRBS to bring Silicon Valley to Edinburgh
8853 views comments | 10 tweets | 8 linkedin

Featured job

London, UK (or flexible)

Find your next job