FINRA FINES BARCLAYS CAPITAL $3 MILLION FOR MISREPRESENTATIONS MADE ON ITS WEBSITE REGARDING RESIDENTIAL MORTGAGE SECURITIZATIONS
The Financial Industry Regulatory Authority (FINRA) has fined Barclays Capital $3 Million for misrepresentations it made regarding historical delinquency data in connection with the issuance of residential subprime mortgage securitizations (RMBS) and its failure to adequately supervise the maintenance and updating of relevant disclosures on its website.
Issuers of RMBS must disclose the historical performance information for past securitizations that held similar mortgages to those in the current offering. In assessing the value of the RMBS being offered, the historical delinquency rates are materials to investors.
FINRA found that Barclays made material misrepresentations about the historical delinquency rates for three RMBS that it underwrote and sold from 2007 to 2010. The inaccurate data was posted on Barclays’ website and was referenced as the historical data for five subsequent RMBS investments. FINRA found the errors significant enough to affect an investor’s evaluation of the RMBS.
Barclays consented to the entry of FINRA’s findings without admitting or denying the charges.