FINRA Slams BGC Financial with $175K Fine for Reporting Errors

In January this year, the Financial Industry Regulatory Authority (FINRA) slammed BGC Financial with a $175,000 fine and a censure order for reporting errors. Although the company did not accept or deny the charges against it, it has agreed to pay the fine.

Details of BGC Financial's $175k Fine

According to FINRA's official statement, there have been incidents of irregularities in BGC's Trade Reporting and Compliance Engine (TRACE). This occurred between January 8th and October 20th, 2022. The regulator mentioned that BGC had failed to correctly record the execution time of more than 3.5 million U.S. Treasury Securities transactions to TRACE.

As an institution licensed by FINRA, BGC Financial is expected to comply with FINRA's rules contained in the letter of acceptance, waiver, and consent. Hence, this fine is in line with FINRA Rule 6730(a), which states that "members should report transactions in TRACE-eligible security on either the same day or no later than the next business day." 

Although the company eventually recorded the execution time of the transactions within the time frame, the recordings needed to be more accurate. This incident occurred as a result of recording many transactions within seconds. 

This penalty came shortly after the Financial Conduct Authority (FCA) started reviewing allegations of fraud and other regulatory violations against BGC Partners. The regulator claimed its source is a former senior employee with specific details of the company's fraudulent activities. 

Sadly, this isn't the first time BGC Financial will be in the news for such allegations. In 2019 CFTC ordered BGC Financial, L.P. to pay $3 million for its failure to establish an adequate supervisory system and to perform its supervisory duties for five years (2014 to 2019).

Another incident occurred in August 2020 when the company was charged with TRACE reporting violations and other supervisory lapses. FINRA fined the company $100,000. The company also signed an undertaking to address these lapses. The company, however, still needs to fulfill its undertaking, judging by its recent reporting lapses.

About BGC

BGC Partners is an American global financial services company created in 2004. It was coiled out of the Cantor Fitzgerald organization, established by Bernard Gerald Cantor in 1945. As part of its restructuring strategy, the company rebranded to BGC Group, Inc. in November 2022.

BGC Financial offers a wide range of financial services, including trade execution and broker-dealer services. BGC Financial became a member of FINRA in 1987. It has offices in London, New York, Tokyo, Paris, and Dubai.