Pershing LLC has agreed to pay a fine of $1.4 million as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From January 2010 through December 2022, Pershing distributed more than one million account statements and trade confirmations that listed inaccurate interest rate information for certain variable rate securities.
The firm also provided inaccurate interest rate information about those securities through the online access portals the firm provided for customers and registered representatives of the introducing firms that used Pershing’s clearing services.
By making and preserving inaccurate books and records, Pershing violated Exchange Act Rule 17a-3(a)(8), NASD Rule 2340 (for conduct prior to May 8, 2019), and FINRA Rules 2231 (for conduct on or after May 8, 2019), 4511, and 2010.
By making these negligent misstatements, Pershing violated FINRA Rule 2010.
During the same period, Pershing failed to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to review the accuracy of interest rate information disseminated by the firm, in violation of FINRA Rules 3110 and 2010.
On top of the $1.4 million fine, the respondent consented to the imposition of a censure.
Pershing LLC has been a FINRA member since 1973. The firm provides clearing services and carries accounts for more than 450 introducing firms on both fully disclosed and omnibus bases. Pershing also provides prime brokerage and trading and execution services.
