SEC Fines BNP Paribas Securities $250,000 For Violating Regulation


US regulator, SEC has fined BNP Paribas Securities (BNPP) $250,000, alleging that broker-dealers had violated the Regulation SHO at least 35 times in four months.

30 June, 2020 | AtoZ Markets – BNP Paribas Securities (f/k/a BNP Paribas Prime Brokerage Inc.) is a broker-dealer. It provides banking and asset management services including capital markets, securities services, financing, treasury and advisory solutions. Moreover, it serves individuals, companies, institutional investors, journalists and shareholders worldwide.

US SEC Charges BNPP in Violation of Regulation SHO

The US SEC has accepted the settlement proposal filed by BNP Paribas Securities. BNP Paribas Securities agree to pay a $250,000 fines to US SEC. Moreover, several sanctions agreed on the BNPP offer. The regulator said:

“BNPP willfully violated Rule 203(a)(1) of Regulation SHO of the Securities Exchange Act of 1934. Without admitting or denying the findings, BNPP agreed to be censured, to cease-and-desist from violating Rule 203(a)(1) of Regulation SHO.”

According to the SEC, between April 2016 and July 2016, BNPP’s customers have submitted long sell to other brokers for execution and then submitted to BNPP for liquidation. BNPP lent its securities to its customers to settle long sales at least 35 times in four months. BNPP violated SHO and other regulation when lending a total of over 8 million shares of three different issuers for the settlement of long sell clearing. SEC said:

“It was not reasonable for BNPP to rely on its customer’s assurances that the orders were properly marked long and that the customer would deliver the securities to its BNPP account before the settlement date. Because BNPP was on notice of the customer’s repeat failures to deliver the securities by the settlement date.”

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