$287B in chronic settlement-fail exposure, surfaced from public SEC data.
We pulled 339,992 records from the SEC's fail-to-deliver register, ran our 27-check capital-markets pack against them, and surfaced 14,156 chronic-offender CUSIPs with $287.48B in chronic dollar exposure. SPY ($13.0B), IWM ($8.76B), LQD ($7.46B), IVV ($7.09B), and VOO ($6.65B) lead the list. Real public data, deterministic checks, sealed CREB on every finding.
JIL is not a CSD, not a clearing house, not a custodian. It is a settlement-integrity layer that sits alongside existing market infrastructure - cryptographic verification of state across institutions, court-admissible evidence packages whenever integrity fails. The Tier 1 scan above costs you nothing; the work begins when you ship your real settlement queue and we run the same engine against it.
Here's what we surface for you.
If you run compliance, surveillance, risk, or settlement operations at a broker-dealer, prime broker, exchange, fund administrator, or institutional asset manager, this is what JIL detects in the capital-markets flows you process. JIL plugs into your existing trade settlement and clearing pipeline, runs 175 checks per record (148 attestation catalog + 27 capmarkets-specific), and produces sealed evidence per finding.
Naked shorting / persistent fail-to-deliver
Counterparty has been failing-to-deliver on the same security for 28+ consecutive trading days, putting you above SEC Reg SHO threshold-list exposure. JIL cross-checks SEC FTD register (339K active records seeded) against your settlement queue and surfaces persistent fails before they trip your close-out obligation.
Customer reps + warranties before settlement
New institutional customer onboarding. JIL screens against SEC IAPD (registered investment advisor disclosed events), FINRA BrokerCheck (50K+ records seeded), CFTC enforcement, OFAC SDN, GLEIF LEI registry, OpenSanctions. Surfaces disciplinary history, prior cease-and-desist orders, beneficial-owner overlap with sanctioned entities.
Suspicious customer activity (FINRA Rule 4530)
Customer pattern matches known wash-trading, layering, spoofing, or pump-and-dump signatures. JIL flags the pattern in real time with sealed evidence supporting your Rule 4530 disclosure obligation - or your decision NOT to disclose with documented reasoning.
Unregistered intermediary detection
Trade routed through a counterparty acting as an unregistered broker-dealer (Section 15(a) of the Exchange Act). JIL cross-checks the counterparty's FINRA / SEC registration status against the trading activity pattern and surfaces unregistered-intermediary risk before settlement.
Sanctioned counterparty screening at trade
Counterparty's beneficial owner overlaps with OFAC SDN, EU CFSP, UK HMT, or US Consolidated Screening List. JIL cross-checks the beneficial-owner graph at trade time, not at end-of-day batch screening - so the trade doesn't settle if the counterparty became sanctioned overnight.
Sealed evidence per cleared / held trade
Every trade that cleared and every trade that was held gets a sealed evidence record showing exactly what was checked. Useful for SEC examination defense, FINRA examination, and internal audit. Court-admissible without an expert witness.
How to use it: integrate via REST API at the trade-clearing or settlement-processing layer. Verdict in sub-second. Pricing per-trade in basis points, with volume tiers. Pilot scoping calls available - bring a representative day's settlement file for a free Tier 1 scan; you keep the findings.
$287.48B chronic settlement-fail exposure.
On day one, capmarkets-engine ingested the SEC fails-to-deliver register for January through March 2026 - 339,992 records spanning 61 settlement dates - and surfaced $287.48B in chronic settlement-fail dollar exposure across 14,156 CUSIPs. The top of the list is dominated by liquid ETFs that no broker, no custodian, no auditor has been able to aggregate this cleanly without a federal subpoena.
What we uncovered (top 5)
| Subject | Category | Finding |
|---|---|---|
| SPY | SPDR S&P 500 ETF | $13.0B chronic FTD across 57 of 61 settlement dates |
| IWM | iShares Russell 2000 | $8.76B across 56 days |
| LQD | iShares iBoxx Investment Grade | $7.46B across 51 days |
| IVV | iShares Core S&P 500 | $7.09B across 24 days |
| VOO | Vanguard S&P 500 ETF | $6.65B across 29 days |
SEC Fails-to-Deliver register
FOIA monthly half-files (cnsfails202601a/b through 202603a/b). No subscription, no DUA, no per-record licensing. The full ingest manifest is replayable bit-identically.
Deterministic pass
Tier 1 ran a single deterministic pass against the ingested public dataset. SQL aggregates only - no stochastic LLM in the verdict path. Ava, our in-house agentic AI, groups, narrates, and routes findings; it never produces the underlying flag. Same kernel that ships the other 7 verticals.
What this means for your business
For a custodian or prime broker, this is the SEC Rule 204 Reg SHO close-out exposure your sub-custodian chain audit team has been trying to quantify. Every chronic-CUSIP entry is a counterparty conversation, an OCC audit preparedness item, and a settlement-priority queue input - not a fraud list, but a reconciliation queue with the dollar-weighted ordering that your existing T+1 ops team cannot produce from internal records alone.
What Tier 2 unlocks. Customer engagement adds the customer's own settlement records, position files, sub-custodian responses, and counterparty correspondence. Tier 2 matches each chronic CUSIP against the customer's actual book exposure, produces remediation packets per counterparty, and seals the result as a court-ready CREB the customer can file with the SEC, FINRA, or DTCC.
Capital Markets Settlement Integrity at a glance.
Where the integrity layer sits, what it produces, and how the sealed CREB flows back to the buyer's existing systems.
Where this product earns its place.
The strategic case for Capital Markets as a JIL line of business - what makes the wedge defensible, what makes it economically meaningful, and how it compounds with the rest of the platform.
Neutral integrity infrastructure
The product converts the neutral-settlement-infrastructure positioning from narrative into operating reality. JIL operates against existing DTCC, Euroclear, Clearstream, and emerging tokenized-securities rails.
Compressed settlement removes the slack
US equities moved to T+1 in May 2024. T+0 is on the regulatory roadmap. As the reconciliation window collapses, pre-settlement integrity becomes structurally more valuable, not less.
No standard exists yet
Tokenized money market funds (BUIDL, FOBXX), tokenized US Treasuries, real estate, and private credit are growing quickly with no credible settlement-integrity standard. JIL can define it.
Post-quantum is immediately relevant
Capital markets infrastructure is a known state-actor target. The Ed25519 + Dilithium-III + ML-DSA-65 + Kyber stack is a sales differentiator at a level it is not in healthcare or P&C.
Net-new checks, sealed evidence.
A representative slice of the Capital Markets-specific check pack. Each one runs in the same five-stage pipeline as the rest of the platform - intake, profile load, parallel checks, verdict, sealed CREB - and ships with a 14-of-20 BFT signature, a CourtChain L1 anchor, and a reproducibility manifest pinning the exact check-logic version.
Position Reconciliation Break
Cross-system position reconciliation across broker, custodian, fund administrator, and CSD. Detects breaks, classifies by type, runs aging analysis.
NAV Recalculation
Independent NAV recalculation from underlying holdings. Cross-references the administrator's NAV. Detects calculation errors, stale-pricing usage, and fee miscalculation.
Atomic Settlement Verification
Verifies both legs of a DvP transaction settled atomically. Detects partial-settlement events and cross-chain integrity failures across tokenized-asset rails.
Corporate Action Entitlement
Independent entitlement calculation against record-date positions. Cross-references multiple data providers. Catches dividend, merger, spin-off, and rights miscalculations.
Settlement Failure Prediction
Predicts probability of settlement failure from counterparty history and securities and cash availability. Pre-emptive action recommendation per SEC Rule 204.
Wash Trade Detection
Detects circular trade patterns where the same beneficial owner is on both sides. Securities Exchange Act Section 9, CEA Section 4c(a)(2).
Spoofing and Layering
Detects order entry without intent to execute - rapid placement and cancellation, layered opposite-side orders. Dodd-Frank Section 747, CFTC Rule 1.38.
Sub-Custodian Chain Integrity
Verifies each link in the custody chain. Confirms asset segregation at each layer. Flags chain-of-custody gaps in emerging-market sub-custodian networks.
Who runs this in production.
The buyer pattern for Capital Markets - who carries the budget, who carries the regulatory exposure, and how the engagement starts. Most first engagements are a Retroactive Proof Audit on a defined lookback window; Pre-Settlement integration follows once the check pack is calibrated to the customer's profile.
Tier 1 custody
BNY Mellon, State Street, JPMorgan, Citi, Northern Trust, BNP Paribas Securities Services, HSBC Securities Services, Brown Brothers Harriman. Tier 1 custodians manage $15T-$45T+ AUC each.
Bulge bracket and specialty
Goldman Sachs, Morgan Stanley, JPMorgan, Bank of America, Citi, UBS, Deutsche Bank, Barclays. Mid-tier specialty: Cowen, Jefferies, Wells Fargo, BTIG, Cantor Fitzgerald.
Independent NAV path
SS&C, Citco, Northern Trust, BNY Mellon, State Street, Apex Group, IQ-EQ, Trident Trust, Maples Group, Ocorian. Independent NAV recalculation is the entry product.
The new issuers
BlackRock (BUIDL), Franklin Templeton (FOBXX), Fidelity, WisdomTree, Securitize, Tokeny, INX, ADDX, Ondo Finance, Maple Finance, Centrifuge.
Four-SKU model. No percentage. No contingency.
Pricing carries over from the canonical four-SKU model unchanged - Retroactive Scan (flat fee), Retroactive Proof Audit (with credit-back against the next subscription tier), Pre-Settlement Subscription (tiered annual), and per-case CREB bundles (Tier 3 court-ready evidence). Asset Intelligence is the standard fifth SKU where the vertical needs it.
No percentage of recovery. No contingency. No success fees. JIL is detection and proof, not recovery. Recovery sits with the customer or its existing partners (subrogation counsel, recovery vendors, regulators). The structure is what allows JIL to operate as neutral integrity infrastructure across plaintiffs and defendants, payers and payees, regulators and the regulated, on the same case.
Ready to scope a Capital Markets engagement?
Initial briefings are 60 minutes. Retroactive Proof Audit lookback windows, check-pack profile design, and integration runbook are available under NDA. We start where the buyer's procurement gate is shortest.
One kernel. Eight industries.
This vertical runs on the same sovereign L1 + attestation network that ships the other 7. Kernel age: 18+ months. Adding a vertical: ~1 week. Competitor moat: build the kernel first.