WASHINGTON–(BUSINESS WIRE)–The Financial Industry Regulatory Authority (FINRA) today announced it
has fined Deutsche Bank Securities Inc. $6 million for failing to
provide complete and accurate trade data in an automated format in a
timely manner when requested by FINRA and the Securities and Exchange
Commission (SEC). As part of the settlement, Deutsche Bank has agreed to
retain an independent consultant to improve its policies, systems and
procedures related to blue sheet submissions.
FINRA and the SEC regularly request certain trade data, also known as
“blue sheets,” to assist in the investigation of market manipulation and
insider trading. Federal securities laws and FINRA rules require firms
to provide this information to FINRA and other regulators electronically
upon request. Blue sheets provide regulators with critical detailed
information about securities transactions, including the security, trade
date, price, share quantity, customer name, and whether it was a buy,
sale or short sale. This information is essential to regulators’ ability
to discharge their enforcement and regulatory mandates.
Cameron Funkhouser, Executive Vice President and Head of FINRA’s Office
of Fraud Detection and Market Intelligence, said, “Firms are expected to
provide complete, accurate and timely blue sheet data in response to
regulatory requests. Incomplete and inaccurate blue sheet data
compromises our ability to identify individuals engaging in insider
trading schemes and other fraudulent activity. Firms must invest the
resources necessary to ensure that they are providing complete and
accurate blue sheet data whenever requested – without exception.”
FINRA found that from at least 2008 through at least 2015, Deutsche Bank
experienced significant failures with its blue sheet systems used to
compile and produce blue sheet data, including programming errors in
system logic and the firm’s failure to implement enhancements to meet
regulatory reporting requirements. These failures caused the firm to
submit thousands of blue sheets to regulators that misreported or
omitted critical information on over 1 million trades.
Additionally, FINRA found a significant number of Deutsche Bank’s blue
sheet submissions did not meet regulatory deadlines. Firms typically
have 10 business days to respond to a blue sheet request. Between
January 2014 and August 2015, approximately 40 percent of Deutsche
Bank’s blue sheets were filed past the regulatory deadline; and
likewise, from July to August 2015, more than 90 percent of Deutsche
Bank’s blue sheets were not submitted to FINRA on a timely basis.
In settling this matter, Deutsche Bank neither admitted nor denied the
charges, but consented to the entry of FINRA’s findings.
FINRA’s investigation was conducted by the Office of Fraud Detection and
Market Intelligence, and the Department of Enforcement.
Investors can obtain more information about, and the disciplinary record
of, any FINRA-registered broker or brokerage firm by using FINRA’s
BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2015,
members of the public used this service to conduct 71 million reviews of
broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck
or by calling (800) 289-9999. Investors may find copies of this
disciplinary action as well as other disciplinary documents in FINRA’s
Disciplinary Actions Online database. Investors can also call FINRA’s
Securities Helpline for Seniors at (844) 57-HELPS for
assistance or to raise concerns about issues they have with their
brokerage accounts and investments.
FINRA, the Financial Industry Regulatory Authority, is the largest
independent regulator for all securities firms doing business in the
United States. FINRA is dedicated to investor protection and market
integrity through effective and efficient regulation and complementary
compliance and technology-based services. FINRA touches virtually every
aspect of the securities business – from registering and educating all
industry participants to examining securities firms, writing rules,
enforcing those rules and the federal securities laws, and informing and
educating the investing public. In addition, FINRA provides surveillance
and other regulatory services for equities and options markets, as well
as trade reporting and other industry utilities. FINRA also administers
the largest dispute resolution forum for investors and firms. For more
information, please visit www.finra.org.