Erroneous Reports, Errors, Cancels, and Rebills

What this video covers

• The seven common forms of trade error (wrong security, quantity, price, account, buy-sell reversal, customer allocation, and failure to follow instructions) and which party each example disadvantages
• Why the firm absorbs all losses from trade errors, never the customer or the representative, and why any accidental profit also belongs to the firm unless written policy states otherwise
• The four-step cancel and rebill correction path: cancel the erroneous transaction, rebill the corrected one, route through the operations department, and obtain written supervisory approval from a qualified registered principal
• Why both the cancel and the rebill appear on the firm's blotter, get recorded in an error account, and remain subject to regulatory review
• How frequent cancels and rebills signal unauthorized trading or allocation fraud, and why regulators trace these patterns to catch cherry-picking of winning trades
• The critical distinction between a trade error (wrong execution) and an erroneous report (correct execution, wrong reported price) on options exchanges
• Why an erroneous report does not void the trade and the actual execution price remains binding under exchange erroneous-report rules