FINRA has fined Citadel Securities $275,000 over allegations of lapses in regulatory reporting. The market-maker neither agreed nor denied the allegations.
March 26, 2021 | AtoZ Markets – The Financial Industry Regulatory Authority (FINRA) has imposed a $275,000 fine on Citadel Securities, the brokerage majority owned by billionaire Ken Griffin, for lapses in regulatory reporting. The self-regulatory body additionally issued a censure order against the company.
The official order issued on Thursday detailed that the market maker had multiple issues while reporting Treasury transactions with the Trade Reporting and Compliance Engine (TRACE) from July 2017 through October 2019.
Citadel Securities fined for allegedly violating FINRA Rules
The alleged specific violations of the Chicago-based firm include ‘incorrectly reporting internal transfers as Treasury transactions, when they were not reportable’, ‘failing to append the “No Remuneration” indicator to TRACE reports for certain Treasury transactions between Affiliates’, and ‘failing to include the correct contra-party type in its TRACE reports for certain affiliate transactions’.
With these reporting lapses, Citadel Securities allegedly violated FINRA Rules 6730 and 2010. Additionally, Citadel Securities violated FINRA Rules 3110(a) and (b) and 2010 as its supervisory system was not reasonably designed to achieve compliance with TRACE reporting rules because it could only detect violations that would generate automatic alerts.Though Citadel Securities agreed to pay the penalty, it neither admitted nor denied the allegations.
“Respondent hereby accepts and consents, without admitting or denying the findings and solely for the purposes of this proceeding and any other proceeding brought by or on behalf of FINRA, or to which FINRA is a party, prior to a hearing and without an adjudication of any issue of law or fact,” the acceptance letter added.
As AtoZ Markets reported in July 2020, Citadel Securities agreed to pay a $700,000 fine to FINRA over allegations that it violated FINRA rules that protect customer orders, promote market transparency, and encourage quote competition.
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