Blue Sheets

If you work for an investment company, you probably don't want to receive a Blue Sheet data request from The Financial Industry Regulatory Authority (FINRA).

As the agency responsible for keeping an eye on brokers and dealers, FINRA might send a request for information to anyone involved in the buying and selling of securities. The requests used to be printed on blue paper, but today the questions and responses are all done online through an official Blue Sheet system.

Perhaps FINRA noticed suspicious activity, such as someone using insider information. Or a security experienced an unusually high level of volatility. FINRA might ask for the stock name, price, date of the trade, how many shares were bought or sold, and the names of the buyers and sellers. A firm or individual can be fined big bucks if they ignore the request or provide incomplete information.

So if Mike the broker gets a tip from his brother-in-law that a new cancer drug is going to be approved by the Food and Drug Administration next week, and he tells all his customers to buy the stock immediately...Mike’s firm will probably receive a Blue Sheet request. And possibly some Orange Jumpsuits.