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Barclays Fined by FINRA - Analyst Blog

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BarclaysPlc . ( BCS">BCS ) has hit the headline and this time for a fine imposed by the Financial Industry Regulatory Authority (FINRA ). The company needs to pay a penalty of $3 million for misrepresentation of data associated with the issuance of residential subprime mortgagesecuritizations (RMBS ).

FINRA accused Barclays for misrepresentation of the historical delinquency rates for three subprimeRMBS it underwrote and sold from March 2007 through December 2010. The company referred to its website for historical information and it was found that the delinquency data posted there were inaccurate.

The extent of error was substantial enough to impact an investor's assessment of successivesecuritizations . Moreover, Barclays has been alleged to have failed to institute a system comprehensive enough to supervise the maintenance and updating of relevant disclosure on its website. While Barclays agreed to pay the fine, the company neither admitted nor denied the charges.

Post financial crisis, regulators have beefed up their investigations ofwrongdoings and misrepresentation of facts by companies while selling their investment products. Besides, Barclays, a number of companies have also been similarly fined byFINRA . Such companies include bigwigs like Credit Suisse Group ( CS ) and Deutsche Bank AG ( DB ).

We believe that while such penalties dent the company's financials to some extent, they boost investors' confidence on the market as a whole.

Barclays currently retains aZacks #3 Rank, which translates into a short-term 'Hold' rating.

BARCLAY PLC-ADR ( BCS ): Free Stock Analysis Report

CREDIT SUISSE ( CS ): Free Stock Analysis Report

DEUTSCHE BK AG ( DB ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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