SEC Fines Stifel Nicholas & BMO Capital Markets $4.65 Million

Stifel Nicholas & BMO Capital Markets Sanctioned for Reportedly Providing Deficient Blue Sheet Data

According to press announcement on September 16, two broker dealers, Stifel, Nicolaus & Co., Inc. and BMO Capital Markets Corp. have agreed to settle charges for providing incomplete and inaccurate securities trading information to the SEC.

Broker-dealers are required to provide the information known as “blue sheet data,” which the SEC uses to carry out its enforcement and regulatory obligations, including investigations of insider trading and other fraudulent activity.

Stifel, Nicolaus & Co., Inc. has reportedly agreed to pay $2.7 million and BMO Capital Markets Corp. has reportedly agreed to pay $1.95 million to settle charges.

Stifel and BMO, over a period of several years, each allegedly made numerous deficient blue sheet submissions containing missing or inaccurate data, largely due to undetected coding errors, according to the complaint.

The SEC found that Stifel failed to report data for approximately 9.8 million transactions and provided inaccurate information for approximately 1.4 million transactions. Separately, the SEC found that BMO submitted missing or incorrect data for approximately 5.4 million transactions.

Neither firm reportedly had adequate processes designed to validate the accuracy of its submissions and each willfully violated the broker-dealer books and records and reporting provisions of the federal securities laws, according to the SEC’s order.

The firms admitted the findings in the SEC’s cease and desist orders and agreed to be censured and to pay penalties of $2.7 million for Stifel and $1.95 million for BMO.

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