FINRA fines Santander Investment Securities for deficient research reports

The Financial Industry Regulatory Authority (FINRA) has imposed a fine of $175,000 on Santander Investment Securities Inc. (SIS) over deficiencies in research reports.

Between January 2016 and August 2019, all equity and debt research reports published by SIS omitted required disclosures or included inaccurate disclosures.

All 411 equity research reports SIS published and distributed to the firm’s institutional customers from January 2016 to August 2019 omitted required disclosures or included inaccurate disclosures required by FINRA Rule 2241(c). In total, there were at least 656 disclosure omissions or inaccuracies.

For instance, in at least 97 instances across 77 equity research reports, SIS failed to disclose that SIS or any of its affiliates expected to receive or intended to seek compensation for investment banking services from a subject company in the subsequent three months.

Similarly, all 60 debt research reports SIS published and distributed to the firm’s institutional customers from July 16, 2016, when FINRA Rule 2242 first came into effect, and August 2019 omitted required disclosures. In total, there were at least 333 disclosure omissions.

On top of the fine, the respondent consents to the imposition of a censure.

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