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State Street fined $1.4m for trading violations

US – State Street has been fined a record $1.4m (€1.2m) by markets regulator NASD over violations in bond trade reporting.

NASD said it had fined State Street Global Markets for failing to report thousands of corporate bond trades to its Trade Reporting and Compliance Engine (TRACE) and hundreds of municipal bond trades to the Municipal Securities Rulemaking Board (MSRB) over a 17-month period.

NASD also cited the Boston-based bank for “supervisory deficiencies relating to corporate and municipal bond trade reporting”.

The bank said it was an “isolated incident”. A spokeswoman said: “We reported the corporate fixed income reporting errors as soon as we identified them and conducted a thorough internal review to make whatever changes needed to ensure this doesn't happen again.

“We are confident that this was an isolated incident. No State Street customers were impacted.”

The fine is NASD’s largest ever imposed against a single firm for fixed income trade reporting violations.

"Investors and dealers in municipal and corporate bonds rely upon TRACE and MSRB trade reporting to provide much-needed price transparency in these markets," said NASD vice chairman Mary Schapiro.

"State Street Global's reporting failures deprived the markets, investors and regulators of critical information, and impaired the integrity of bond trading data that market participants rely upon to make informed investment decisions."

NASD said State Street neither admitted nor denied the charges, but consented to the entry of NASD's findings.


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