FINRA Fines Barclays Capital Inc. $700,000 for Violations

Barclays Capital Inc. faces a significant penalty as the Financial Industry Regulatory Authority (FINRA) fines the firm $700,000 for multiple violations. The sanctions come as a result of a series of alleged rule breaches spanning from January 2016 to March 2022, involving failures in disclosure and supervision.

According to the details disclosed by FINRA, Barclays Capital Inc. has been a member of FINRA since 1987, operating with approximately 2,900 registered representatives across 16 branch offices. The firm, headquartered in New York, offers a range of services including trade execution, clearing, investment banking, and research.

The violations outlined by FINRA stem from several instances of non-compliance with regulatory requirements. Notably, Barclays failed to establish and maintain a supervisory system to ensure compliance with rules related to research analyst conflicts of interest. This failure resulted in the firm neglecting to monitor its research analysts' managed brokerage accounts adequately, leading to undisclosed financial interests in covered companies and instances of trading inconsistencies.

Among the specific infractions highlighted by FINRA were failures to disclose analysts' financial interests in covered securities, lapses in reviewing trading activities in external managed accounts, and inadequacies in disclosing conflicts of interest regarding compensation received by affiliates. These breaches of FINRA rules were compounded by a lack of robust written supervisory procedures (WSPs) designed to prevent such violations.

Barclays' shortcomings were brought to light through two self-reports filed by the firm pursuant to FINRA Rule 4530. Prior to August 2019, the firm's supervisory systems were deemed insufficient, with deficiencies in monitoring trading activities and ensuring compliance with regulatory standards.

In response to the violations, Barclays Capital Inc. has submitted a Letter of Acceptance, Waiver, and Consent (AWC) to FINRA, proposing a settlement of the alleged rule breaches. The firm has accepted and consented to FINRA's findings without admitting or denying them. Additionally, Barclays has agreed to pay the $700,000 fine and accept a censure.

In consenting to the settlement, Barclays has waived certain procedural rights granted under FINRA's Code of Procedure, including the right to have a complaint issued specifying the allegations, to defend against the allegations in a disciplinary hearing, and to appeal any decision made.

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