By failing to report the corporate trades on NASD's Trade Reporting and Compliance Engine (TRACE) and the municipal trades to the Municipal Securities Rulemaking Board (MSRB), State Street put other investors at a disadvantage because investors look to TRACE and MSRB for volume and price transparency , NASD said. The regulator said State Street made the errors because it failed to set up support of new accounts properly.
"State Street Global's reporting failures deprived the markets, investors and regulators of critical information and impaired the integrity of bond trading data that market participants rely upon to make informed investment decisions," said NASD Vice Chairman Mary Schapiro.
The fine is the largest that NASD has ever charged a single firm for bond reporting failures. State Street neither admitted nor denied the charges, but a company spokeswoman told Reuters the firm has since revamped its operations training program to make sure such an oversight does not occur again.