NASD enforcement actions filed against individuals and firms for Trade Reporting and Compliance Engine (TRACE) system reporting rules violations doubled to eight in February from January filings. The fines ranged from $10,000 to $225,000 and the firm violations included late or inaccurate reporting of bond transactions, failure to timestamp and/or maintain municipal trade order tickets, and failure to prepare adequate written supervisory procedures to comply with the new Municipal Securities Rulemaking Board reporting requirements, according to the NASD enforcement actions.

In one Filing the NASD fined Houston-based Global Financial Services and three of its registered principals, Robert Benjamin, Gerardo Chapa and Ricardo Perusquia, a total of $100,000. The NASD alleged that the firm, acting through Benjamin, Chapa and Perusquia, failed to establish, maintain and enforce a system including written procedures, to supervise the activities of its registered representatives to ensure compliance with TRACE rules. In addition each of the three registered principals received a 30-day suspension from association with any NASD member. The enforcement action states that the firm acting through the three principals either failed to report or reported late information on corporate bond transactions through TRACE. The firm and the three principals consented to the sanctions without admitting or denying the allegations.

After the January effective date of the amendment to NASD Rule 6250, which required TRACE disclosure within 15 minutes of the transaction, both compliance officers and regulators warned that there would likely be increased enforcement actions for failure to comply with the rule (CR, 2/13). NASD Rules 3012 and 3013, which mandate that firms must report on their supervisory procedures and certify their compliance processes, also applies to compliance with the TRACE reporting rules, they said.