SEC Official Concerned about Conflicts in Fixed Income Trading
In a recent speech, James Brigagliano, Deputy Director of the SEC’s Division of Trading and Markets, lauded and encouraged FINRA’s efforts to address conflicts of interest in fixed income research. Mr. Brigagliano is concerned that debt research may be used as a way to manipulate the market in order to allow a firm with a large position to unload securities in a manipulative manner. He cited a 2008 case in the auction rate securities market.
OUR TAKE: Mr. Brigagliano’s concern affects the definition of “material non-public information” in fixed income trading as well as potential blackout periods in Codes of Ethics.
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