FINRA fines firms $2.8 million

The firms substantially overstated their advertised trade volume to three private service providers.

The Financial Industry Regulatory Authority has fined 19 firms a total of $2.8 million for substantially overstating their advertised trade volume to three private service providers.
FINRA handed down penalties of $200,000 each to eight companies including subsidiaries of Merrill Lynch & Co. Inc. and UBS AG.
Six companies were handed down $150,000 penalties, including The Bear Stearns Cos. Inc, Deutsche Bank AG and RBC Capital Markets Corp.
The New York- and Washington-based self-regulatory organization said figures in August 2006 showed that every company fined made “substantial overstatements” in at least one security, according to a statement.
“When firms provide their trade volume to third party vendor for dissemination to market participants, it is critically important that firms take appropriate steps to ensure that their advertised trade volume is accurate,” said Thomas Gira, FINRA executive vice president and head of the Department of Market Regulation, according to a statement.
Piper Jaffray & Co. had its fine reduced to $100,000 because the company conducted its own extensive internal investigation and then voluntarily provided the results to FINRA.
Four other firms were fined $50,000 apiece, including Friedman Billings Ramsey Group Inc. and Jefferies & Co. Inc.