Liquidnet, the New York agency broker owned by TP ICAP Group, will pay $250,000 and accept a censure to settle Financial Industry Regulatory Authority (FINRA) charges that it published six years of inaccurate execution-quality reports, the regulator said in a settlement letter accepted Monday.Singapore Summit: Meet the largest APAC brokers you know (and those you still don't!)It is the second time in four years FINRA has censured the firm for the same category of order-execution reporting errors. The company’s Canadian subsidiary was also fined three weeks ago after foreign stuff could pick at client orders.Sixty-Seven Million Orders MisclassifiedBetween February 2018 and March 2024, Liquidnet published 74 inaccurate monthly reports under Regulation NMS Rule 605, according to FINRA's Letter of Acceptance, Waiver and Consent. The reports cover statistical information that market centers must publish each month on how they handle and execute orders in NMS securities.“The firm erroneously included in its Rule 605 reports approximately v67 million orders that required special handling because the firm incorrectly classified those orders as covered orders,” FINRA said in the statement.Treating those as standard covered orders skewed the order and execution-quality statistics that buy-side clients, regulators, and rival venues rely on to compare execution performance.FINRA identified the inaccuracies during a March 2023 examination of the firm. By April 2024, Liquidnet had implemented coding fixes that removed the misclassified orders from its monthly disclosures, the settlement letter said.A Repeat of the 2022 SettlementThis is not Liquidnet's first encounter with the same rule. In February 2022, the firm consented to a $50,000 fine and a censure over 30 inaccurate Rule 605 reports filed between August 2015 and January 2018. That earlier matter involved a different mistake, with marketable limit orders classified as inside-the-quote limit orders.Liquidnet joins a list of broker-dealers FINRA has penalized in recent years over Rule 605 reporting failures, suggesting the regulator continues to comb monthly disclosures for misclassified orders and supervisory gaps.In July 2022, BofA Securities was fined $325,000 for publishing 107 inaccurate Rule 605 reports between January 2014 and February 2022. The errors there involved combining order data from two market centers, MLCO and MLIX, and misclassifying orders due to technological issues. Five months later, FINRA fined Instinet $165,000 over 54 inaccurate reports tied to its Continuous Block Cross alternative trading system, where the firm had erroneously excluded orders it incorrectly treated as subject to special handling.Early 2023 brought a $475,000 censure for UBS Securities, which had published 41 inaccurate reports for its UBSA dark pool because of a coding error that mixed parent and child orders. . This article was written by Damian Chmiel at www.financemagnates.com.

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