Jefferies Settles FINRA Charges with $37,200 Fine Over Trading Violations

Jefferies LLC has agreed to pay a fine of $37,200 as part of a settlement with the Financial Industry Regulatory Authority (FINRA) over violations related to the handling of restricted trading periods in securities offerings. The firm was found to have inadequately designed its supervisory system between January 2018 and September 2022, failing to ensure compliance with key aspects of Regulation M, a law governing trading during securities offerings.

Under Regulation M, broker-dealers and underwriters are prohibited from engaging in certain trading activities, such as purchasing or inducing purchases of covered securities during their restricted periods, which typically occur before and after an offering. Jefferies was found to have not conducted adequate supervisory reviews to ensure compliance with these rules, which led to the firm's failure to identify prohibited transactions during these periods.

In addition to the financial penalty, Jefferies has also agreed to a censure. The settlement resolves similar issues with other firms, resulting in a total fine of $250,000. The action was coordinated with several other exchanges, including the New York Stock Exchange and Nasdaq, which also participated in the enforcement process. Jefferies did not admit to the violations but agreed to the settlement to resolve the matter.