FINRA Fines Wall Street Banks $43.5M for Research Analyst Conflict of Interest in Toys“R”Us IPO
11th December 2014
FINRA announced today that it has fined 10 investment banks a total of $43.5 million for allowing their equity research analysts to solicit investment banking business and for offering favorable research coverage in connection with the 2010 planned initial public offering of Toys"R"Us.The banks promised favorable research to Toys“R”Us Inc. and its private-equity owners in 2010 to win roles in its initial public offering. FINRA faulted the firms for “implicitly or explicitly” making promises that their analysts would give positive coverage. Six of the ten firms didn’t have adequate supervisory procedures to prevent the practice.
FINRA fined the following firms:
- Barclays Capital Inc. – $5 million
- Citigroup Global Markets Inc. – $ 5million
- Credit Suisse Securities (USA), LLC – $5 million
- Goldman, Sachs & Co. – $5 million
- JP Morgan Securities LLC – $5 million
- Deutsche Bank Securities Inc. – $4 million
- Merrill Lynch, Pierce, Fenner & Smith Inc. – $4 million
- Morgan Stanley & Co., LLC – $4 million
- Wells Fargo Securities, LLC – $4 million
- Needham & Company LLC – $2.5 million