13F-HR/A: StoneX Group Amends 13F Filing After Reporting Errors

StoneX Group Inc. files an amendment to its 13F report to correct under-reported securities, shares, and market values from Q4 2021 through Q1 2025.

Summary

• StoneX Group Inc. has filed an amendment to its Form 13F, addressing errors in previous quarterly filings from Q4 2021 through Q1 2025.
• The original filings under-reported the total number of securities, shares, and market values.
• The errors affected StoneX Advisors Inc., StoneX Financial Inc., and Trust Advisory Group, Ltd.
• The review identified four main causes for the errors:
• Missing Market Making Accounts: Three market making accounts were excluded from Q4 2021 to Q4 2024.
• Formula Error in Excel: From Q1 2022 to Q4 2022, the firm used "XLOOKUP" instead of "SUMIF" in Excel, causing only the first instance of a CUSIP to be counted.
• Failure to Implement Rule Change: SEC Rule 87 FR 38943, requiring dollar values to be rounded to the nearest dollar, was not properly implemented from Q4 2022 to Q1 2025.
• Excel Scientific Notation Error: From Q4 2021 to Q1 2025, CUSIPs with an "E" were converted into scientific notation, misidentifying certain reportable securities.
• The amended report includes a total of 433 entries in the Form 13F Information Table.
• The total value reported in the Form 13F Information Table is $1,566,820,827.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the admission of reporting errors, but slightly mitigated by the firm's actions to correct them.

Positives

• The company has identified and corrected errors in its previous filings.
• The company has conducted an internal review of its reporting practices.
• The company is taking steps to ensure compliance with SEC regulations.

Negatives

• Previous 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.
• Missing Market Making Accounts; Between Q4 2021 and Q4 2024, three market making accounts were inadvertently excluded from the Firm's filings.
• Formula Error in Excel; From Q1 2022 to Q4 2022, the Firm mistakenly used "XLOOKUP" functionality instead of "SUMIF" in Excel causing only the first instance of a CUSIP to be counted.
• Failure to Implement Rule Change; SEC Rule 87 FR 38943 requiring all dollar values to be rounded to the nearest dollar, rather than to the nearest one thousand dollars, was not properly implemented from Q4 2022 to Q1 2025.
• Excel Scientific Notation Error; Between Q4 2021 and Q1 2025, CUSIPs with an "E" were inadvertently converted into scientific notation in Excel. This led to the misidentification of certain reportable securities.

Risks

• Potential for regulatory scrutiny due to past reporting errors.
• Reputational damage due to inaccurate filings.
• Risk of similar errors occurring in the future if internal controls are not strengthened.

Future Outlook

No future outlook provided in the filing.

Industry Context

This filing is part of the regular reporting requirements for institutional investment managers and highlights the importance of accurate and compliant SEC filings.

Comparison to Industry Standards

• Comparable companies include other institutional investment managers such as BlackRock, Vanguard, and State Street.
• Industry standards require accurate and timely reporting of holdings as mandated by SEC regulations.
• Failure to comply with SEC regulations can result in penalties and reputational damage, as seen in cases involving other firms with reporting deficiencies.

Stakeholder Impact

• Shareholders: May have concerns about the accuracy of past financial reporting.
• Regulatory bodies: SEC may scrutinize the company's reporting practices.
• Clients: May require reassurance about the reliability of the firm's services.

Next Steps

• Strengthening internal controls to prevent future reporting errors.
• Ensuring compliance with SEC regulations.
• Reviewing and updating reporting practices.

Key Dates

Recommendation

Given the restatement due to significant reporting errors, a sell recommendation is warranted until the firm demonstrates improved internal controls and compliance. The errors raise concerns about the reliability of financial information and could negatively impact investor confidence.

Keywords

SEC filing, Form 13F, amendment, securities, StoneX Group, reporting errors, institutional investment manager