WASHINGTON – Chicago-based Mesirow Financial has agreed to pay $20,000 to settle Financial Industry Regulatory Authority charges that the firm violated disclosure and supervisory rules by failing to submit official statements, advance refunding documents, and other required paperwork to EMMA on time.
In an agreement dated Sept. 14, Mesirow submitted to the fine without either admitting or denying FINRA’s findings that the firm violated two Municipal Securities Rulemaking Board Rules when it failed to file 25 of 111 documents in a timely fashion between March 1 2015 and April 30 2016.
MSRB Rule G-32 on disclosures in connection with primary offerings requires that underwriters submit official statements to EMMA within a business day of receiving it from the issuer, and by no later than the closing date. During the period examined by FINRA, examiners found that 11 official statements were filed late. The late official statements were submitted an average of almost 22 days late. The median number of days late was 15. The fewest number of days late was one and the highest number of days late was 49.
G-32 requires that advance refunding refunding documents and related information be filed no later than five business days after closing. FINRA found that Mesirow failed to do so on eight occasions during the examination period. The late advance refunding documents were submitted an average of about 127 days late, FINRA said. The median number of days late was 153. The fewest number of days late was two and the highest number of days late was 233.
Amendments to documents must be submitted within one business day of receipt, but FINRA found that six amendments were filed an average of 44 days late. The median number of days late was just under six. The smallest number of days late was two and the highest was 235.
FINRA also found that Mesirow violated the MSRB’s Rule G-27 on supervision, which requires that firms have written supervisory procedures “reasonably designed” to ensure compliance with applicable laws and rules.
“During the period March 1, 2015 through April 30, 2016, Mesirow's written supervisory procedures failed to designate one or more persons, either by name or by title or position, who were to be responsible for the G-32 submissions in its competitive underwriting department, leading to ambiguity about that responsibility and a resulting lack of accountability to ensure timely filings,” FINRA said in the settlement.
Mesirow did not respond to a request for comment.
