FINRA Charges Santander Investment Securities with Deficient Research Reports

​The US Financial Industry Regulatory Authority (FINRA) has charged the institutional broker-dealer - Santander Investment Securities Inc. (SIS) with deficient research reports, requiring the firm to pay a penalty of $175,000.

Based on the announcement, between January 2016 and August 2019, all equity and debt research reports published by SIS omitted required disclosures or included inaccurate disclosures.

Specifically, the financial watchdog found that SIS published 411 equity research reports with a total of 656 disclosure omissions or inaccuracies in violation of FINRA Rules 2241(c) and 2010. Similarly, between July 16, 2016 and August 2019, the firm published 60 debt research reports with a total of 333 disclosure omissions in violation of FINRA Rules 2242(c) and 2010.

And FINRA noted that SIS’s omissions were the result of the firm’s failure to establish and maintain a supervisory system reasonably designed to achieve compliance with the disclosure requirements of FINRA Rules 2241(c) and 2242(c), as well as its failure to enforce its relevant written supervisory procedures. As a result, SIS also breached FINRA Rules 3110(a)-(b) and 2010.

Apart from monetary sanction, SIS also consented to the imposition of a censure.