BofA Securities, Inc has agreed to pay a $90,080 fine as part of a settlement with the Financial Industry Regulatory Authority (FINRA).
Between August 2019 and August 2022, BofA Securities violated FINRA Rules 5190 and 2010 on 195 occasions by submitting untimely or inaccurate notifications to FINRA in connection with its participation in 112 securities distributions subject to Regulation M under the Exchange Act securities of the 19.
Additionally, between August 2019 and March 2024, BofaS violated FINRA Rules 3110(a), 3110(b), and 2010 by failing to establish and maintain a system of oversight, including written supervisory procedures (WSPs), reasonably designed to achieving compliance with FINRA Rule 5190;
Regulation M is the SEC’s primary anti-manipulation provision that applies to distributions of covered securities and is intended to address manipulative behavior by preventing persons with an interest in the outcome of a distribution from influencing the pricing of those distributions and regulating the market in order to facilitate distribution.
Rule 101 of Regulation M makes it unlawful for underwriters, brokers, issuers and other distribution participants to “offer, purchase, or attempt to induce any person to offer or purchase, a covered security during the applicable limited period.”
Depending on the security, the restricted period begins either one or five business days before the offer price is set or, if the restricted period has already begun, at that time a firm becomes a distribution participant.
During the relevant period, BofA Securities acted as trustee in distributions of securities subject to Regulation M. As such, the firm was required to file notices pursuant to FINRA Rule 5190 with respect to 112 distributions subject to Regulation M. Between August 2019 and August In 2022, BofAS filed untimely or inaccurate limited period and transaction notices with FINRA in 195 cases.
In addition to the fine, the company agreed to a reprimand.