NEW YORK: Regulators fined 10 investment firms a total of $43.5m for promising positive write-ups on toystore chain Toys”R”Us in exchange for lucrative investment banking business.
The Financial Industry Regulatory Authority said the firms “offered favourable research coverage” in 2010 in exchange for a role in an initial public offering of the company. Toys”R”Us subsequently cancelled plans for the IPO.
“FINRA’s research analyst conflict-of-interest rules make clear that firms may not use research analysts or the promise of offering favorable research to win investment banking business,” said FINRA executive vice president Susan Axelrod.
AFP
