Two broker-dealers – Stifel, Nicolaus & Co. and BMO Capital Markets Corp. – settled allegations made by the Securities and Exchange Commission that they failed to provide securities trading information or provided inaccurate data in response to requests for such information – known as “blue sheet data” – by the Commission for prolonged periods of time.
According to the SEC, from approximately January 1, 2015, through September 30, 2018, Stifel reported only 8 million transactions of 17.8 million requested, and of the transactions it did report, 1.4 million contained inaccurate data. The SEC claimed that Stifel incurred errors because it did not have “adequate processes” to verify that information it was reporting was accurate. Stifel agree to pay the SEC US $2.7 million to resolve the agency’s charges. In agreeing to this amount, the SEC acknowledged the firm’s remediation efforts, which began prior to the SEC contacting Stifel.
Similarly, the SEC alleged that BMO, from approximately January 6, 2014, through August 13, 2018, made 4,074 submissions containing data for 5.4 million transactions – all of which were deficient in one or more ways. BMO agreed to pay US $1.95 million to resolve the SEC’s allegations. The SEC also acknowledged BMO’s remedial efforts in accepting the firm’s settlement.
Late in 2018, the SEC fined three broker dealers in excess of US $6 million for their failure to submit accurate blue sheet data records as a result of undetected coding errors. (Click here for details in the article "Undetected Coding Errors Lead to More Than US $6 Million in SEC Fines for Three Broker-Dealers for Blue Sheet Reporting Violations" in the December 16, 2018 edition of Bridging the Week.)