The National Futures Association (NFA) has charged Tullett Prebon Financial Services, an Introducing Broker, for multiple possible violations of its compliance rules, the self-regulatory body announced last week.
The official complaint detailed that the Introducing Broker did not keep voice recordings of telephone calls associated with a block trade which was brokered by two TPFS APs on both the buy-side and sell-side.
“TPFS was unable to produce the voice recordings NFA requested because the firm had failed to retain the voice recordings for either AP involved on January 7, 2020 block trade,” the complaint stated. Tullett Prebon did not recognize the phone recording violation until the regulatory body requested it in an examination of the firm.
The self-regulator further charged the company for failing to establish and maintain an adequate system to supervise its member employees’ recordkeeping activities and communications. This issue went undetected by the firm for around 18 months.
These companies are obligated to diligently supervise the member employees’ commodity interest activities.
“The firm also failed to detect or ignored an error on a telecommunication report the IT department utilized during the 2018 office move since the report listed the incorrect retention period of 96 hours for one of the affected APs,” the complaint added.
The Decision Is Yet to Be Made
For the two charges, Tullett Prebon is looking at expulsion or suspension from its NFA membership for a specified period. It might also be censured, along with a monetary penalty of up to $500,000 for each violation count. Additionally, the regulator can issue a cease and desist order or other penalties which might not be inconsistent with regular penalties.
Headquartered in New York, Tullett Prebon Financial Services operates as an Introducing Broker and has been an NFA member since 2003. It has around 70 registered associated persons (APs) and offers intermediary services to institutional customers.
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