13F-HR/A: StoneX Amends 13F Filings, Corrects Under-Reported Holdings

StoneX Group Inc. filed an amended Form 13F-HR to correct systemic under-reporting of securities holdings and market values from Q4 2021 through Q1 2025 due to multiple internal errors.

Summary

• StoneX Group Inc. filed an amended Form 13F-HR for the calendar quarter ended March 31, 2023, as Amendment Number 2.
• The amendment adds new holdings entries to correct under-reported total securities, shares, and market values in quarterly filings from Q4 2021 through Q1 2025.
• The errors involved StoneX Advisors Inc., StoneX Financial Inc., and Trust Advisory Group, Ltd.
• The total value of holdings reported in the amended Form 13F Information Table is $168,117,099.
• A total of 440 entries are included in the amended Form 13F Information Table.

Sentiment

Score: 6

Explanation: While the proactive internal review and correction of errors are positive for transparency and compliance, the underlying systemic and prolonged nature of the reporting issues (missing accounts, formula errors, rule non-implementation) indicates significant internal control weaknesses. The score reflects a slight positive bias due to the company's initiative to rectify the situation.

Positives

• The company conducted an internal review of its Section 13(f) reporting practices to identify and address discrepancies.
• The filing demonstrates a commitment to correcting past errors and improving the accuracy and completeness of regulatory disclosures.

Negatives

• Systemic under-reporting of securities, shares, and market values occurred across multiple quarterly filings from Q4 2021 through Q1 2025.
• Errors stemmed from multiple causes including inadvertently excluded market making accounts, Excel formula errors (using XLOOKUP instead of SUMIF), failure to implement a new SEC rule on dollar rounding, and Excel scientific notation errors for CUSIPs.
• The issues indicate deficiencies in internal reporting controls and processes over a prolonged period.

Risks

• Operational risk due to identified internal control deficiencies in financial reporting processes, which led to prolonged under-reporting.
• Reputational risk associated with inaccurate regulatory filings and the need for multiple amendments.
• Potential for increased regulatory scrutiny or penalties due to non-compliance with SEC reporting requirements over several quarters.
• The Securities and Exchange Commission has not necessarily reviewed the information in this filing and has not determined if it is accurate and complete, and readers should not assume accuracy or completeness.

Future Outlook

NA

Management Comments

• "During an internal review of StoneX Group Inc.'s Section 13(f) reporting practices we discovered the quarterly filings from Q4 2021 through Q1 2025 under-reported the total number of securities, shares and market values."
• "The errors involved all Other Reporting Managers: StoneX Advisors Inc., StoneX Financial Inc., and Trust Advisory Group, Ltd."

Industry Context

This filing highlights the ongoing challenges financial institutions face in maintaining accurate and compliant regulatory reporting, particularly with complex data management and evolving SEC rules. While specific to StoneX, such operational errors can occur across the industry, underscoring the importance of robust internal controls and technology infrastructure for regulatory compliance.

Corporate Governance

Stakeholder Impact

• Shareholders: Provides more accurate and complete information regarding the firm's investment holdings, improving transparency and potentially trust in reported data.
• Regulatory Authorities: Demonstrates the firm's effort to comply with SEC reporting requirements, potentially mitigating further regulatory action, but also highlights past non-compliance.
• Management: Indicates a need for enhanced oversight and improvement in internal control systems for financial reporting and data integrity.

Next Steps

• Implied: Implementation of improved internal controls and reporting processes to prevent recurrence of similar errors.

Key Dates

Recommendation

This filing is an amendment to correct past reporting errors, which is a necessary compliance action. While the proactive internal review and correction are positive for transparency, the systemic nature of the errors (spanning multiple quarters and involving various operational and technical issues) suggests underlying weaknesses in internal controls and reporting processes. For an investor, this indicates a need for continued monitoring of the company's operational integrity and compliance efforts. It does not present new fundamental information that would warrant a 'buy' or 'sell' action, but rather reinforces a 'hold' stance while the company addresses its internal control environment.

Keywords

StoneX Group Inc., SEC filing, Form 13F-HR/A, holdings report, amendment, under-reporting, financial reporting, compliance, institutional investment manager, market making accounts, Excel errors, SEC Rule 87 FR 38943