What Happened

BNP Paribas Securities Corp. (BNPS), the U.S. broker-dealer arm of the French banking giant BNP Paribas, failed to report 842 large over-the-counter options positions to FINRA’s Large Options Positions Reporting (LOPR) system across 167,520 separate reporting instances between October 2019 and April 2024. These were not minor clerical oversights on a handful of trades. They were systematic gaps in the regulatory surveillance architecture that exists specifically to detect market manipulation.

The LOPR system exists for a clear purpose. FINRA uses it to identify who holds large options positions and to monitor for manipulative conduct: cornering the market in an underlying stock, using options to artificially move prices, or leveraging a large position to shift the value of related securities. In the OTC options market, LOPR data is the only source regulators have. There is no exchange reporting, no independent data feed. When a firm like BNPS fails to report there, it creates a blind spot in market surveillance that regulators cannot compensate for.

Regulatory context

FINRA Rule 2360(b)(5) requires member firms to report any customer or firm account holding an aggregate position of 200 or more option contracts on the same side of the market in the same underlying security or index. The rule also covers transactions intermediated on behalf of foreign non-member broker-dealers under Exchange Act Rule 15a-6(a)(3). BNPS’s entire reporting failure centered on its role as exactly that kind of intermediary.

Five Failures, One Pattern

The settlement document details five distinct technical and procedural breakdowns, all stemming from a single business arrangement: BNPS acting as the U.S.-side intermediary between its foreign BNP Paribas affiliates and American customers. Each failure is characterized in the settlement as a system error or human mistake. Taken together, they describe a firm that migrated to a new reporting system in October 2019 and then spent nearly five years discovering, one by one, that the new system was not doing its job.

Failure Root cause Instances Duration
1. Stale salesperson data New system not set up to receive location updates; data became outdated post-migration 36,163 Oct 2019 – Mar 2021
2. Missing salesperson field Trading system began dropping salesperson info before passing trades to LOPR system 80,630 Oct 2019 – May 2021
3. Non-U.S. fund exclusion Migration logic excluded all non-U.S. fund transactions from LOPR eligibility review 30,200 Oct 2019 – Feb 2022
4. Wrong trader identifier U.S. salesperson entered initials of a former Asia-Pacific trader; system misattributed trades 3,778 Apr 2020 – Aug 2023
5. Data field formatting error Trading system placed location data in the wrong field; LOPR system could not read it 16,776 Jun 2022 – Apr 2024

Note that failures one, two, and three all began in October 2019, the same month BNPS migrated to a new LOPR reporting system. The migration introduced each of these gaps. The firm then identified them sequentially over the following two and a half years, while all three were still actively producing unreported positions. Failure four began the following spring and was not self-reported and remediated until August 2023. Failure five began in June 2022 and persisted until April 2024.

The accuracy of LOPR reporting is essential to FINRA’s surveillance. It is particularly important with respect to the OTC options market because there is no independent source of data for regulators to review OTC options.

FINRA AWC No. 2021069219701, p. 2

The Supervisory System That Was Not Designed to Work

Separate from the reporting failures themselves, FINRA found that BNPS’s supervisory system was not reasonably designed to catch them. This violation runs from October 2019 all the way to April 2025, six months after the final reporting failure was remediated and more than five and a half years after the first system migration errors began.

During this entire period, BNPS’s written supervisory procedures (WSPs) called for reviewing randomly selected options transactions to assess whether they were correctly reported to the LOPR. The settlement is explicit about the problem: those random reviews were not designed to ensure that a sufficient number of intermediated transactions would be reviewed. Because the firm’s reporting failures all arose specifically from its intermediary role, a random sampling procedure would be systematically unlikely to catch them.

The firm remediated the supervisory failure in April 2025, implementing new procedures that recalculate LOPR eligibility on a daily basis for each OTC options position. That this is described as a new capability rather than a baseline expectation says something about how the firm had been operating since 2019.

The Price of Accountability

Proportionality check: what BNP Paribas earns vs. what it paid

FINRA fine for 167,520 unreported instances, five years of supervisory failure
$125,000
BNP Paribas Group net income (2023)
~$12.2 billion
Fine as a share of 2023 group net income
~0.000001
Prior Cboe BZX fine for earlier LOPR violations (May 2022)
$50,000
Combined regulatory cost for years of LOPR failures
$175,000

A Prior Record That Did Not Prevent Recurrence

This is not BNPS’s first encounter with LOPR enforcement. In May 2022, Cboe BZX Exchange fined the firm $50,000 for LOPR reporting violations spanning November 2014 to May 2020. That action covered approximately 24,283 instances of failed or over-reported positions and 2,602 instances of inaccurate reporting.

The current FINRA action covers conduct that began in October 2019, meaning there is a substantial period of overlap. BNPS was being investigated and sanctioned by Cboe for LOPR violations while it was simultaneously creating new LOPR violations through its 2019 system migration. The Cboe action did not prevent the conduct documented in this settlement. The question of what systemic consequence, if any, attaches to that pattern is one the $125,000 fine does not answer.

Timeline of events

  • October 2019
    BNPS migrates to a new LOPR reporting system. Three separate reporting failures begin simultaneously as a result of the migration.
  • April 2020
    A U.S. salesperson begins using the wrong trader identifier when entering transactions. The error is not detected for over three years.
  • June 2020
    BNPS discovers the stale salesperson data issue (Failure 1). A fix is implemented in October 2020, but the firm does not backfill the unreported positions until March 2021.
  • March 2021
    BNPS identifies the missing salesperson field issue (Failure 2) and remediates it in May 2021.
  • February 2022
    BNPS remediates the non-U.S. fund exclusion (Failure 3). The issue had run continuously since October 2019.
  • May 2022
    Cboe BZX Exchange fines BNPS $50,000 for earlier LOPR violations spanning 2014 to 2020. New violations continue concurrently.
  • June 2022
    A data field formatting error (Failure 5) begins producing unreported positions. It will run for nearly two years.
  • August 2023
    BNPS self-reports and remediates the wrong trader identifier issue (Failure 4). The error had persisted since April 2020.
  • April 2024
    BNPS remediates the data formatting error (Failure 5). Reporting violations finally end, four and a half years after they began.
  • April 2025
    BNPS implements new daily LOPR eligibility recalculation procedures. Supervisory violation finally ends, five and a half years after it began.
  • January 8, 2026
    BNPS signs the AWC. FINRA accepts it on January 12, 2026. The firm is censured and fined $125,000.

What the Settlement Does Not Address

The AWC, by its nature, resolves the regulatory matter without any finding of intentional misconduct. BNPS neither admits nor denies the findings. The document does not assess whether market participants were harmed by the surveillance gaps the firm created, whether any of the 842 unreported positions would have triggered regulatory attention under normal reporting, or what, if any, trading activity went unmonitored as a direct consequence of these failures.

What the record does establish is this: for more than four and a half years, a major U.S. broker-dealer systematically failed to give regulators the data they needed to monitor one of the least-transparent corners of the options market. The mechanism designed to catch that failure, the firm’s own supervisory system, was not built to work. And the financial consequence imposed upon remediation is smaller than the average American annual household income.

Note on methodology

All facts in this article are drawn directly from FINRA AWC No. 2021069219701, accepted January 12, 2026. Financial comparison figures use BNP Paribas Group’s publicly reported 2023 net income. The AWC is a public document available through FINRA’s BrokerCheck system.