Siebert Williams Shank & Co has been censured and fined $55,000 by the Financial Industry Regulatory Authority for rule violations including reporting inaccurate trade times for roughly 12,100 municipal securities transactions.
New York-based Siebert, a full-service brokerage firm with approximately 130 registered representatives across 33 branches, accepted and consented to FINRA's findings without admitting or denying them, according to a
Between August 2021 and August 2023, FINRA found, the firm violated Municipal Securities Rulemaking Board Rule G-14 by failing to report the correct time of trade for about 12,100 municipal securities transactions to the MSRB's Real-time Transaction Reporting System and by failing to report to another roughly 4,700 muni securities transactions to the RTRS, the document said.
The firm also violated MSRB Rule G-27 by failing to set up and maintain a supervisory system – including written supervisory procedures – "reasonably designed to ensure compliance with MSRB Rule G-14," the settlement document said.
The inaccurate trade times reported for roughly 12,100 transactions between August 2021 and May 2023 were related to a default setting on the firm's order management system.
"Instead of reporting the time the trade was executed on the firm's electronic order management system, due to a default setting on the firm's order management system, the firm reported the later time at which the firm's personnel confirmed the customer order," the document said. "This also caused approximately 160 trades to be reported to the RTRS late."
MSRB Rule G-14 requires transactions to be reported within 15 minutes of the time of trade, except in limited circumstances. Such circumstances weren't present in Siebert's case, the document said.
Between August 2021 and August 2023, Siebert failed to report to the RTRS approximately 4,700 step-out trades in municipal securities, the document said. A step-out trade, according to a document footnote, "is when a broker receives and executes a block order from another entity."
Siebert's order entry system required operations personnel to enter manually a specific code for step-out trades; otherwise, they were processed as customer trades. The 4,700 trades were executed initially in a customer account but were later cancelled and re-booked to the master account for step-out trades at the firm's clearing broker, the document said.
"When the trades were cancelled for re-booking, the initial trade reports that were submitted to the RTRS also were cancelled," the settlement document said. "The firm did not report the corrected trades to the RTRS."
By August of 2023, Siebert had changed the settings in its order entry system for muni securities pertaining to time of trade, provided more training to personnel and updated its written supervisory procedures, a document footnote said.
Siebert has been a FINRA member and an MSRB registrant since 1997, the settlement document said. The MSRB, a self regulatory organization, is the municipal securities market's principal regulator. FINRA, also an SRO, is responsible for examining its members that are municipal securities dealers or municipal advisors and also for enforcing MSRB rules.
"The firm takes its trade reporting obligations seriously and has corrected the issue," a Siebert spokesperson said Wednesday.
