FINRA Fines Barclays Capital for Misrepresentations

The Financial Industry Regulatory Authority (FINRA) recently announced that it has fined Barclays Capital Inc. $3 million for misrepresenting delinquency data and inadequate supervision in connection with the issuance of residential subprime mortgage securitizations (RMBS).

Issuers of subprime RMBS are required to disclose historical performance information for past securitizations that contain mortgage loans similar to those in the RMBS being offered to investors. Historical delinquency rates are material to investors in assessing the value of RMBS and in determining whether future returns may be disrupted by mortgage holders’ failures to make loan payments.

FINRA found that from March 2007 through December 2010, Barclays Capital misrepresented the historical delinquency rates for three subprime RMBS it underwrote and sold. The inaccurate delinquency data posted on Barclays’ website was referenced as historical information in five subsequent RMBS investments and contained errors significant enough to affect an investor’s assessment of subsequent securitizations. Additionally, Barclays failed to establish an adequate system to supervise the maintenance and updating of relevant disclosure on its website.

In settling this matter, Barclays neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

This information, which is publicly available on FINRA’s website, is being provided by The White Law Group. The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. To speak with a securities attorney, please call 312-238-9650.

For more information on The White Law Group, please visit the firm’s website at https://whitesecuritieslaw.com.