Pershing LLC has agreed to pay a fine of $175,000 fine as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From June 1997 through June 2023, Pershing failed to report millions of fractional share trades executed in a principal capacity with customers.
During a sample period of June 2012 through June 2023 alone, Pershing failed to report over five million fractional share trades with customers to the FNTRF or ORF. As a result, Pershing did not pay the regulatory transaction fees associated with these trades.
By virtue of the foregoing, Pershing violated FINRA Rules 6380A, 6622, and 2010, and NASD Rules 4632, 4642, 6420, 6620, and 2110.
From June 1997 through June 2023, Pershing failed to establish, maintain, and enforce a supervisory system for the reporting of fractional share trades.
Although the firm devised a supervisory framework for such reporting in July 2022, the system was not implemented until June 2023.
By virtue of the foregoing, Pershing violated FINRA Rules 3110, and 2010, and NASD Rules 3010, and 2110.
On top of the $175,000 fine, the firm also consents to the imposition of a censure and an undertaking to pay the regulatory transaction fees as required for unreported fractional share trades executed between June 1997 and June 2023.
