A Barclays unit agreed to a settlement with the Financial Industry Regulatory Authority over allegations of conflict of interest violations, according to FX News Group.
FINRA released a letter of acceptance, waiver and consent in the case against Barclays Capital. Without admitting or denying the findings, Barclays agreed to pay $700,000 and be censured.
FINRA determined that the firm’s research analysts violated conflict-of-interest rules and the firm failed to sufficiently supervise their trades.
Under FINRA rules relating to research analyst conflicts of interest, a firm must have policies and procedures prohibiting an analyst from trading in a security in a manner inconsistent with the analyst’s published rating of that security. In addition, a member must disclose in an equity research report if an analyst has a financial interest in the securities of a company covered in the report. FINRA said that from January 2016 to August 2019, Barclays failed to establish and maintain a supervisory system reasonably designed to comply with these rules.
According to the AWC letter, “Barclays failed to timely or reasonably monitor its research analysts’ managed
brokerage accounts for compliance with trading restrictions on equity research analysts or to
determine if they held securities in companies they covered. As a result, the firm failed to identify and did not disclose in equity research reports that analysts held securities of a covered company and did not discover three instances in which an analyst’s external account manager traded in a manner inconsistent with the analyst’s most recently published recommendation on a company.”
Barclays was found to be in violation of FINRA Rules 2241(b)(2)(J), 224l(c)(4)(A), 31 lO(a) and (b)(l), and 2010.
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