Finra has ordered Morgan Stanley to pay a $300,000 fine over trade reporting violations allegedly caused by human error and the wirehouse’s reporting system, the industry’s self-regulator says.
From July 2015 through 2018, the company allegedly failed to report in a timely manner on 1,068 fixed income transactions to the Trade Reporting and Compliance Engine or the Real-time Transaction Reporting System, according to a letter of acceptance, waiver and consent published by Finra. The untimely reports were allegedly due to employees’ manual errors as well as an improper setup of product codes in the firm’s reporting system, the industry’s self-regulator says.
In addition, due to another coding error in Morgan Stanley’s Trace system that caused prices to be reported to the wrong decimal point, several trades allegedly failed to match with counter-party reports and were rejected by Trace, according to the letter of acceptance. While the company then manually corrected the rejected reports, it failed to do so within the specified timeframe, Finra says.
Morgan Stanley consented to a censure and the fine without admitting or denying the industry self-regulator’s findings, according to the letter of acceptance.
The wirehouse had run into trouble over trade reporting in the past. In May 2015, Morgan Stanley paid a $225,000 fine for trade reporting violations to Trace, and in October 2015, it paid a $102,500 fine for late reporting of Trace-eligible securities, Finra says.
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