Barclays Capital agrees to pay FINRA $700,000 fine
As part of its settlement with the Financial Industry Regulatory Authority (FINRA), Barclays Capital Inc has agreed to pay a $700,000 fine.。
Barclays Capital Inc. has agreed to pay a $700,000 fine as part of a settlement with the Financial Industry Regulatory Authority (FINRA).
Under FINRA rules related to conflicts of interest with research analysts, a firm must establish policies and procedures prohibiting analysts from trading securities in a manner inconsistent with their disclosed ratings on those securities. Additionally, member firms must disclose in stock research reports if analysts have financial interests in securities of covered companies.
From January 2016 to August 2019, Barclays failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs) reasonably designed to comply with these rules.
Specifically, Barclays failed to timely or reasonably monitor its research analysts' brokerage accounts to ensure compliance with restrictions on analyst trading or to determine whether they held securities of covered companies. As a result, the firm failed to identify and disclose analyst holdings of covered company securities in 99 stock research reports and failed to detect three instances of analysts' external account managers trading inconsistently with the analysts' latest published recommendations on companies.
As a result, the firm violated FINRA Rules 2241(b)(2)(J), 2241(c)(4)(A), 3110(a) and (b)(1), as well as Rule 2010.
The firm's WSPs also did not include reasonably designed procedures to review securities transactions in research analysts' external brokerage accounts to identify potential violations of securities laws, including potential market manipulation and insider trading. Consequently, the firm violated FINRA Rule 3110(d) and Rule 2010.
From at least April 2021 to March 2022, the firm failed to obtain data from certain affiliates of Barclays to determine whether specific conflicts of interest needed to be disclosed in its research reports. As a result, the firm failed to disclose in at least 803 reports covering 22 issuers that affiliates had received compensation unrelated to investment banking from issuers in the past 12 months.
Therefore, the firm violated FINRA Rule 2241(c)(4)(D) and Rule 2010.
In addition to paying the $700,000 fine, the respondent also agreed to accept censures.
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