BofA Securities Fined $325,000 by FINRA for Reporting Deficiencies

BofA Securities, an American multinational investment banking division under the auspices of Bank of America, agreed to pay a fine of  $325,000 in a settlement with the Financial Industry Regulatory Authority (FINRA).

It is reported that 107 monthly reports issued by BofA Securities between January 2014 and February 2022 released inaccurate data, in violation of Regulation NMS Rule 605 issued by the US Securities and Exchange Commission in 2005.

During the above period, BofA Securities had two market centers, a broker- dealer (MLCO) and a ATS (MLIX). Pursuant to Regulation NMS Rule 605, BofA Securities was required to report statistical information concerning order executions for the two markets separately. However, between January 2014 and April 2021, the company classified MLIX as "away executed shares" and reported it’s data in MLCO monthly report. Separate reporting of MLIX orders started to implement in April 2021.

In total, from January 2014 through February 2022, the firm published 98 inaccurate monthly Rule 605 reports of order executions by MLCO and nine inaccurate monthly Rule 605 reports of order executions by MLIX, for a total of 107 inaccurate Rule 605 reports.

In addition, BofA's monitoring system between January 2014 and November 2021 was not adequately designed to detect anomalies in its order execution, also in violation of Rule 605.

Last month, FINRA had ordered National Securities Corp.​ to pay $9 million for various regulatory violations.