Navaid Financial Services consented to a censure and a $35,000 fine to settle allegations by the Financial Industry Regulatory Authority that the firm violated municipal securities rules relating to transaction reporting and supervision.
Haddonfield, N.J.-based Navaid, a FINRA member and a Municipal Securities Rulemaking Board registrant since 1997, accepted FINRA's findings without admitting or denying them, according to a settlement document dated Dec. 3.
FINRA found that from May 29, 2018 through July 23, 2024, the firm failed to include the non-transaction-based compensation indicator when reporting 12,066 municipal securities transactions to the MSRB's Real-time Transaction Reporting System. That put the firm in violation of MSRB Rule G-14, which sets out transaction reporting requirements for municipal securities.
"Accurate and timely reporting to the RTRS ensures correct dissemination of transaction information, increases price transparency, and enhances regulatory oversight of municipal securities trading," FINRA said, adding that "Rule G-14 RTRS Procedures (b)(iv) requires firms to report the applicable 'special condition indicators.'"
Among those special condition indicators is the NTBC indicator, which is required for customer transactions that don't include a mark-up, mark-down or commission, FINRA said.
"From May 29, 2018 through July 23, 2024, Navaid reported to the RTRS 12,066 municipal securities transactions with customers that did not include a mark-up, mark-down, or commission," FINRA said in its findings, adding that Navaid failed to include the NTBC indicator on any of those reports because the firm wasn't aware of the requirement to include the indicator.
"Therefore, Navaid violated MSRB Rule G-14(b)," FINRA said.
In addition, from at least May 29, 2018 to June 30, 2025, Navaid "failed to establish and maintain a supervisory system, including written supervisory procedures, that was reasonably designed to ensure compliance with MSRB Rule G-14, in violation of MSRB Rule G-27," the settlement document said.
"MSRB Rule G-27 requires brokers, dealers and municipal securities dealers to establish and maintain a supervisory system, including written procedures, to supervise the conduct of their municipal securities activities to ensure compliance with MSRB rules and applicable provisions of the Securities Exchange Act of 1934 and Exchange Act rules," the document said.
Navaid did not respond to requests for comment.
