FINRA Slams Bank of America Unit for Late Notices

Bank of America Securities, a New York-based broker-dealer, filed approximately 195 problematic notifications with FINRA between August 2019 and August 2022, according to the self-regulatory organization’s final notice released Tuesday. it also lacked written supervisory procedures describing how it would comply with FINRA Rule 5190.

Details: The notifications were required under Regulation M, the Securities and Exchange Commission’s anti-manipulation order.

Regulation M “prohibits underwriters, broker-dealers, issuers, and other distribution participants, directly or indirectly, from “bidding, purchasing, or attempting to induce any person to bid or purchase a covered security during the applicable limited period”; ” FINRA said, noting that the limited period is one or five business days before the offering price is set, depending on the security. If the restricted period has already begun, the restricted period will apply when the company becomes a distribution participant.

Of the 195 problematic notices, 72 were restricted period notices that were filed with a delay of one to nine days, and 71 of the notices contained inaccurate information, FINRA said. Seventeen transaction notifications were submitted with a delay ranging from one to 498 days, and 35 transaction notifications were incorrect.

Compatibility Notes: The regulator noted that BofA Securities did not have supervisory systems in place to ensure the timely submission of notices to FINRA or procedures to verify that the information contained in the notices was accurate.

The final notice did not indicate what steps the company was taking to address the notification issues.

BofA did not immediately respond to a request for comment.