This episode focuses on the trends in FINRA Enforcement over the course 2023.  TRADEliance discusses a several high level trends before doing a more in depth discussion on two topics: Manipulative Trading and Market Access.  Jesy and Kat crack open some mediocre bubbly to celebrate this episode.Firms should take note of conducting thorough testing to prevent and detect system issues.Many of the trends in enforcement also highlight the need for training.Other topics discussed include:Trade ConfirmationsRecordkeeping 605/606TRACE Trade Reporting LOPR Private Placements Reg Sho Best Ex Market Orders for New Issues in the Secondary Market Marking to Market Surveillance CAT Oversubscription of Partial Tender Offers For information on any of the cases discussed, contact solutions@tradeliance.comSupport the show

Listen in as TRADEliance discusses considerations for a robust Testing Plan.Drink every time we say testing….  No, not really, don't do that!We encourage firms to create a testing plan that goes beyond a 3120/206-7 testing obligationWritten Supervisory Procedures vs Supervisory Controls Procedures Testing samples should be targeted and random and targeted Think of testing vendors, systems and data as three of the pillars that will support a thorough testing planFINRA Guidance on Supervision TopicsSupport the show

Totals in Fines:  Disgorgement: $11,000,000 + Prejudgment Interest $3,375,072, Firm Civil Penalty: $4,400,000, and Adviser Civil Penalty: $600,000Jesy is drinking wine in the laundry room 😊 RulesInvestment Advisers Act Rule 206-2Investment Company Act Section 17(A)1 and 17(A)2Investment Adviser Act uses anti-fraud for Best ExecutionThe Asset Management Company was pricing the bond trades, not the broker dealers Asset Manager prices the executions, executions impact the evaluated pricing model, Net Asset Value (NAV) is calculated with the evaluated price, Asset Manager is paid a % of the NAVGood opportunity for both Broker Dealers and Investment Advisers to review their Best Execution and Fair Pricing practicesSEC EnforcementSEC Risk AlertSEC Statement on Investment Company Cross Trading Registration for TRADEliance's Upcoming Bullet Point PanelSupport the show

This episode takes a slightly different approach!  Listen in as TRADEliance discusses the difference between best ex, fair pricing and reasonable compensation while highlighting some cases that support these differences.  Best Execution:  How is the Order Handled ? Fair Pricing: What is the actual price to the client? Reasonable Compensation: What is the BD entitled to charge for that trade? Are you supervising these topics separately? The disciplinary cases discussed in this episode are listed below:Best Execution Case #1Best Execution Case #2Best Execution Case #3  Fair Pricing Case #4Fair Pricing Case #5Reasonableness of Compensation Case #6 Reasonableness of Compensation Case #7 Enjoy!Support the showSupport the show

Listen to Jesy and Kat discuss the 2023 Report on FINRA's Examination and Risk Monitoring Program!We couldn't cover everything in the 75 page report, but we do manage to tackle the following topics: Market Integrity Books and Records Firm Short Positions and Fails to Receive in Municipal SecuritiesReg BICATBest Execution Disclosure of Routing Information Fixed Income Fair Pricing, Fractional Shares and Reg SHO.Also - Jesy is sick and drinking boxed wine, while Kat gets fancy enjoying some Prosecco.  The link to the AWC Jesy referred to during the podcast is here.Enjoy!Support the show

Listen in as TRADEliance brainstorms their comment letter for the Regulation Best Execution Proposal!  Topics discussed include: The Antifraud Provisions of the Exchange Act as the mechanism for enforcementConflicted TransactionsImpacts to Introducing BrokersUse of Last Look The need for consistency in definitionsRead the Proposal here.www.tradeliance.comTRADEliance consultants have the knowledge and first hand experience to improve your firm's trading operations or compliance processes.https://www.buymeacoffee.com/finesandwinesSupport the show

$675,000 fine for issues related to TRACE Trade Reporting.Let’s start a book club!  The ladies are currently reading the Bond King by Mary Childs and had a fangirl moment when she acknowledges them on LinkedinKat and Jesy are on a quest for a good box wineItemized TRACE Issues (It’s a lot) Late Trades No Remuneration Indicator Non-member Affiliate trade reportsFactored corporate bonds SupervisionMajor theme:   Systemic IssuesMake sure you are supervising rejected tradesHow inclusive is your supervisory reviews?Read the AWC here.www.tradeliance.comTRADEliance consultants have the knowledge and first hand experience to improve your firm's trading operations or compliance processes.https://www.buymeacoffee.com/finesandwinesSupport the showSupport the show

$850,000 fine for issues related to statements and required disclosuresThe ladies share their love of Snoop Dogg and the Bond Dealers of America National Fixed Income eventStatements can be hardVendor Oversight is harderNegligent is the case that they gave me, I’m fresh up out my certification to FINRA that my systems are compliant.Read the full AWC here.www.tradeliance.comTRADEliance consultants have the knowledge and first hand experience to improve your firm's trading operations or compliance processes.https://www.buymeacoffee.com/finesandwinesSupport the show

$250,000 for missing trade reporting indicatorsKat finally gets to go to the grocery store Jesy drinks mystery anniversary wineTrade reporting issues due to system programmingSpecification manuals are fun!Does your firm have a trade reporting committee?Read the full AWC here.www.tradeliance.comTRADEliance consultants have the knowledge and first hand experience to improve your firm's trading operations or compliance processes.https://www.buymeacoffee.com/finesandwinesSupport the show

$1.1 billion in Fines between 16 firms, most firms being individually fined $125 MillionJesy is a picky pinot drinkerThe girls reminisce on their visit to Woodinville Winery Town in Washington.   Thanks Adam!The trouble with carpooling…Bad books and records due to employees using personal text, email, and WhatsAppBYOD (bring your own device) and a pandemicWho is empowered to impact policies and procedures?Read the Press Release for these cases here.Read the Press Release for JP Morgan here.www.tradeliance.comTRADEliance consultants have the knowledge and first hand experience to improve your firm's trading operations or compliance processes.https://www.buymeacoffee.com/finesandwinesSupport the show

$2.8 Million Fine for Trade Confirmation Issues Jesy and Kat review an AWC listed in the August 2022 FINRA disciplinary actions report Jesy finds her favorite wine for cheapKat buys wine from a gas stationTrade Confirms and SupervisionSystematic issues and misunderstanding of regulationRead the AWC here.www.tradeliance.comTRADEliance consultants have the knowledge and first hand experience to improve your firm's trading operations or compliance processes.https://www.buymeacoffee.com/finesandwinesSupport the show

Introduction to Fines and Wines Meet Jesy LeBlanc and Kat Miller, the founders of TRADEliance.  This brief episode shares how Jesy and Kat met and their passion for talking about financial regulation while drinking wine.  TRADEliance is a consulting firm for broker dealer and investment adviser firms in the areas of trading operations and compliance. www.tradeliance.comSupport the show