Barclays Capital reached an agreement to pay a $700,000 fine as part of a settlement with the FINRA.

The settlement stems from alleged violations of FINRA rules regarding conflicts of interest involving research analysts. According to these rules, firms must have policies in place to prevent analysts from trading securities in a manner inconsistent with their published ratings, and must disclose any financial interests analysts may have in covered companies.

Between January 2016 and August 2019, Barclays purportedly failed to establish and maintain a supervisory system, including written procedures, to comply with these rules. Specifically, the firm neglected to adequately monitor its research analysts' managed brokerage accounts for compliance with trading restrictions or to ascertain if they held securities in covered companies. This failure resulted in the non-disclosure of analyst-held securities in 99 equity research reports, as well as the oversight of three instances where an analyst's external account manager traded against their published recommendations.

These actions led to violations of several FINRA rules, including 2241(b)(2)(J), 224l(c)(4)(A), 3110(a) and (b)(1), and 2010. Furthermore, Barclays' written supervisory procedures lacked a process to review securities transactions in analysts' external accounts for potential securities law violations, such as market manipulation and insider trading, thus contravening FINRA Rules 3110(d) and 2010.

Additionally, from April 2021 to March 2022, Barclays allegedly failed to gather data for certain clients of its affiliates to determine if disclosure of conflicts of interest was necessary in research reports. Consequently, the firm omitted disclosures in at least 803 reports covering 22 issuers, indicating affiliations and compensation received from issuers within the preceding 12 months, in violation of FINRA Rules 2241(c)(4)(D) and 2010.