BofA Securities, Inc. has agreed to pay a fine of $90,080 to settle with the Financial Industry Regulatory Authority (FINRA).

Between August 2019 and August 2022, BofA Securities violated FINRA Rules 5190 and 2010 a total of 195 times by failing to promptly or accurately notify FINRA in 112 distributions of securities subject to Regulation M of the Securities Exchange Act of 1934.

Additionally, between August 2019 and March 2024, BofAS violated FINRA Rules 3110(a), 3110(b), and 2010 by failing to establish and maintain a supervisory system, including written supervisory procedures (WSPs), that was reasonably designed to ensure compliance with FINRA Rule 5190.

Regulation M is the primary anti-manipulation rule of the U.S. Securities and Exchange Commission (SEC) applicable to distributions of covered securities. It aims to address manipulation by preventing interested parties from influencing the pricing and market regulation of these distributions.

Section 101 of Regulation M states that it is illegal for underwriters, brokers, issuers, and other distribution participants to directly or indirectly “bid for, purchase, or attempt to induce any person to bid for or purchase a covered security” during the applicable restricted period.

The restricted period begins either one or five business days before the determination of the offering price, depending on the type of security, or at the time the company becomes a distribution participant if the restricted period has already begun.

During the relevant period, BofA Securities acted as a manager in distributions subject to Regulation M. Therefore, the firm was required to submit notifications for 112 distributions subject to Regulation M under FINRA Rule 5190. Between August 2019 and August 2022, BofAS submitted late or inaccurate notifications to FINRA 195 times during restricted periods and for trading notifications.

In addition to the fine, the firm has also agreed to a censure.