Wells Fargo Clearing Services and LPL Financial are each paying $900,000 in civil penalties for providing inaccurate trading data over the course of several years, the SEC stated Friday.
The two companies had filed thousands of incomplete or inaccurate “blue sheet” submissions with the Securities and Exchange Commission, according to the regulator.
“We use blue sheet data to detect wrongdoing and to protect investors through our enforcement efforts,” said Thomas Smith, Jr., associate regional director in the SEC’s New York Regional Office, in an announcement of the penalties. “These orders underscore the importance of the obligation to provide accurate and complete blue sheet data to the SEC. Additionally, these resolutions highlight the benefits of self-reporting, remediation, and cooperation when firms detect violations.”
Wells Fargo made more than 11,000 such filings that were incomplete or contained inaccuracies, reflecting a total of at least 10.6 million transactions, the SEC stated. LPL made more than 3,600 filings with incomplete or inaccurate data, amounting to 399,000 or more transactions.
The two companies admitted to the findings and agreed to be censured, in addition to the monetary penalties. They both made remedial efforts to current and improve their blue sheet reporting systems, the SEC stated. In Wells Fargo’s case, the problems were self-reported, the agency said.
“Wells Fargo is pleased to resolve this matter. We’re gratified that the settlement acknowledges the company’s self-identification and self-reporting, as well as its substantial enhancements and cooperation. This matter did not impact any clients,” a Wells Fargo spokesperson said in a statement.
Similarly, LPL noted that it cooperated and took steps to address the issue.
“This matter relates to historical issues with formatting and submission of certain data to regulators that did not impact financial professionals or their clients,” a company spokesperson said in an email. “This has been an industry-wide challenge, and we are pleased to have resolved the matter.”
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