Odeon Capital Group LLC agreed to pay a fine of $ 75,000 as part of a settlement with the Financial Industry Regulatory Authority (Finra).
Since July 2019, Odeon has not had a supervisory system, including written supervisory procedures (WSPS), logically designed to accelerate for potentially manipulating preliminary transactions.
The company was based on its registered representatives to identify and escalate to the supervisory bodies that precede the negotiation and its supervisors to identify such transactions as part of the daily revision of transactions using trade reports and summaries. However, these reports are not designed to accelerate for possible preliminary negotiation.
The company used a daily summary of trade in fixed income transactions containing hundreds of rows in the body of an e -mail, which cannot be filtered or sorted to identify templates such as the compensation of transactions performed in close proximity to the same security for the same security.
A supervisor trying to re -examine for a specific potentially manipulative commercial activity should manually identify this type of commercial activity in different series of information in a daily report, without the ability to observe historical trends.
In addition, the company’s WSPs did not provide information or instructions on how to review the preliminary negotiation, what information to identify or evaluate such a review or what measures are needed to address the indications of predetermined transactions.
As a result of the unjustified supervisory system of the business, Odeon has failed to accelerate for at least 138 cases of potentially manipulative predetermined transactions. In most of these cases, ODEON registered representatives executed the compensation of the markets and sales submitted by email by one customer, often by purchasing ODEON by a counterparty and selling to the other, without the business identifying the transactions as required supervisory review.
As a result, Odeon violated the Finra 3110 and 2010 rules.
In addition, since December 2019 and December 2021, ODEON provided written commercial confirmations to non-institutional customers who failed to disclose the required surcharge and marking information on 717 municipal titles and debt and debt transactions of the MSR 2010.
Odeon also failed to oversee logically to comply with the requirements of the surcharge and announcement, in violation of the MSRB G-27 rule and the FINRA 3110 and 2010 rules.
For these violations, Odeon was convicted, imposed a fine of $ 75,000 and agreed with a company to remedy issues.