FINRA Member Fined for Recording Inaccurate Trading Order Details

The Case

The firm failed to establish and maintain a supervisory system, including WSPs, reasonably designed to supervise the accuracy of order times on its order memoranda. As a result, the firm listed inaccurate order receipts and/or transmission times on 30 percent of the order memoranda for customers’ option orders.

The action also highlights that the firm failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs) designed to oversee the accuracy of order memoranda, including order receipt and transmission times. 

Why Does This Matter?

The enforcement action highlights the importance of establishing and maintaining a supervisory system to ensure regulatory compliance.  

InnReg's Experience

InnReg has over a decade of experience developing effective supervisory frameworks for fintechs based on a systematic approach to identifying risks, implementing effective controls, and enhancing internal documentation to reduce regulatory burdens. InnReg’s compliance consulting services empower fintechs to enhance policies, processes, and technologies for e-communications compliance.

Learn More About This Topic

For additional details, read how InnReg’s Fintech Compliance checklist can help your fintech build best practices to meet evolving regulatory requirements. InnReg’s framework includes an end-to-end guide for reviewing and testing a supervisory system, conducting business reviews, and testing.

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On December 30, 2024, the US Department of the Treasury and the IRS issued final regulations focused on decentralized finance (DeFi) platforms and their role in digital asset transactions.

The Securities and Exchange Commission announced charges against nine investment advisors and three broker-dealers for failures by the firms and their personnel to maintain and preserve electronic communications in violation of recordkeeping provisions of the federal securities laws.

The SEC’s order finds that, from at least October 2018 until January 2022, an investment advisory firm stated in its offering materials and other documents provided to prospective and existing private fund investors that it was voluntarily complying with AML due diligence laws despite those laws not applying to investment advisors.

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© 2025 InnReg LLC

9100 S Dadeland Blvd
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Miami, Florida 33156

The content provided on this website is for informational purposes only and does not constitute legal, investment, tax, or other professional advice. InnReg LLC is not a law firm, tax advisor, or regulated financial institution. Viewing this site or contacting InnReg does not create a client relationship. Results described in case studies or testimonials may not be typical and do not guarantee future outcomes. Tools, spreadsheets, or guides available on this site are provided for illustrative purposes only and should not be relied upon without professional guidance. Any links to third-party websites are provided for convenience and do not constitute endorsement or responsibility for their content. The information on this site may not be applicable in all jurisdictions. While we strive to provide accurate content, we make no representations as to its completeness or timeliness. Some visual assets on this site are sourced from Freepik.

LinkedIn Innreg
X InnReg
Quora Innreg
Blog Innreg

© 2025 InnReg LLC

9100 S Dadeland Blvd
Suite 1500
Miami, Florida 33156

The content provided on this website is for informational purposes only and does not constitute legal, investment, tax, or other professional advice. InnReg LLC is not a law firm, tax advisor, or regulated financial institution. Viewing this site or contacting InnReg does not create a client relationship. Results described in case studies or testimonials may not be typical and do not guarantee future outcomes. Tools, spreadsheets, or guides available on this site are provided for illustrative purposes only and should not be relied upon without professional guidance. Any links to third-party websites are provided for convenience and do not constitute endorsement or responsibility for their content. The information on this site may not be applicable in all jurisdictions. While we strive to provide accurate content, we make no representations as to its completeness or timeliness. Some visual assets on this site are sourced from Freepik.