The Securities and Exchange Commission (SEC) announced yesterday that Cantor Fitzgerald & Co agreed to pay $3.2 million to settle charges for submitting incomplete and inaccurate securities trading information (blue sheet data) to the SEC.
SEC’s order states that for five years Cantor Fitzgerald provided deficient blue sheet data with missing or inaccurate information, mostly due to inadequate accuracy validating processes of its submissions and undetected coding errors. The Commission found that Fitzgerald submitted inaccurate information on 35 million transactions. Broker-dealers are required to provide trading information. SEC uses the data in investigations of insider trading and other fraudulent activity.
Kelly L. Gibson, Director of the SEC’s Philadelphia Regional Office commented:
The SEC depends on broker-dealers to provide it with complete and accurate trade data. When they fail to meet that obligation, it hinders our ability to detect wrongdoing and protect investors.
The agency found Cantor Fitzgerald in violation of the broker-dealer books and records and reporting provisions. The firm also admitted SEC’s findings and agreed to be censured and pay a penalty of $3.2 million. The SEC’s order found that Cantor Fitzgerald made efforts to remedy the situation of incomplete data submissions. The company retained an outside consultant and adopted new policies and procedures to process blue sheet requests.
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