Firm to Pay $2 Million for Failing to Stop Analysts from Leaking to Press
A large broker-dealer agreed to pay a $2 Million fine and upgrade compliance policies and procedures for failing to detect and prevent research analysts from sharing non-public information with the media. In one instance, a senior analyst shared earnings information with a reporter in violation of the firm’s policies. Even after discovery, the Senior Analyst received a positive performance evaluation with respect to “Adherence to Dept. Guidelines.” In another case, a junior analyst shared pre-IPO information with a technology blog, but the firm did not discover the conduct until it received subpoenas from the Massachusetts Securities Division. As part of the settlement, the firm agreed to enhance its electronic surveillance program and conduct additional training.