FINRA fines Dealerweb $25,000 for muni violations
A New Jersey dealer firm agreed to pay $25,000 to settle charges that it violated multiple municipal securities rules after the Financial Industry Regulatory Authority found it failed to correctly report 147,000 trades.
Dealerweb agreed Thursday to pay those fines and be censured while neither admitting nor denying FINRA’s findings that it violated Municipal Securities Rulemaking Board Rule G-14, on reports of sales or purchases, MSRB Rule G-8, on books and records, and MSRB Rule G-27, on supervision. Dealerweb paid $15,000 for violating MSRB Rules G-14 and G-8 and $10,000 for violating MSRB’s supervision rule.
Dealerweb is a broker-dealer that acts as an interdealer broker, facilitating trades between buyers and sellers on electronic and voice platforms. Dealerweb is a wholesale unit of Tradeweb Markets, a large fixed-income electronic trading platform company.
"We have addressed the concerns raised by FINRA and we are pleased to resolve this matter," a Tradeweb spokesperson said.
From April 2016 through March 2019, Dealerweb failed to report about 147,000 trades to the MSRB’s Real-time Transaction Reporting System in increments of seconds, FINRA said. RTRS collects and disseminates transaction data to enhance market transparency. Those 147,000 trades constituted 100% of the municipal transactions reported by the firm, FINRA said.
Before April 2016, Dealerweb’s trade reporting system reported the seconds in municipal transactions.
“In April 2016, the firm changed its order management system, which gave rise to a system issue that resulted in transactions being reported with ‘00; in the seconds field,” FINRA said.
That went on until April 2019, when FINRA notified the firm of the issue.
From October 2017 through December 2017, Dealerweb failed to report the correct time of the trade in 167 reports to the RTRS and failed to timely report those transactions to the RTRS, FINRA found.
“In the same 167 instances, Dealerweb failed to record the correct time of trade on its trade memorandum in violation of MSRB Rule G-8,” FINRA wrote.
From April 2016 through March 2019, Dealerweb failed to conduct a documented comparison required under its written supervisory procedures to confirm the accuracy of the time of trade reported to the MSRB. Also, the WSPs did not designate the supervisor responsible for the time of trade review, FINRA said.
Dealerweb has been a FINRA member since 1987 and still has its registration. It has three branch offices and has 125 registered employees.