U.S. regulators have sanctioned BofA Securities Inc. for failing to report millions of options trades over more than 10 years.
The Financial Industry Regulatory Authority Inc. (FINRA), the U.S. self-regulatory organization, fined BofA US$5 million for failing to report over-the-counter options positions in more than 7.4 million instances between 2009 and 2020, along with related supervisory failures.
The firm settled the case and consented to the entry of FINRA’s findings without admitting or denying the allegations.
FINRA said the issue, which was uncovered by its trading and financial compliance examination team, violated reporting requirements that are in place so FINRA can properly oversee the markets and guard against potentially manipulative trading.
This sort of reporting is “essential to FINRA’s surveillance, and is particularly important with respect to the OTC options market because there is no independent source of data for regulators to review OTC options activity,” it noted in a release.
“FINRA relies on accurate reporting of transactions in order to maintain the integrity of the markets,” said Jessica Hopper, executive vice-president and head of enforcement, in a release.
Along with the fine, the firm also agreed to a censure and to certify that it has adequately enhanced its supervisory procedures to comply with the reporting requirements.