Barclays fined £1.9m for sub-prime misrepresentation

Barclays has been fined £1.9m by a US regulator for misrepresenting data and offering inadequate supervision relating to sub-prime mortgage-backed securitisations.

The Financial Industry Regulatory Authority (Finra) says that between March 2007 and December 2010, the bank misrepresented past arrears data for three sub-prime residential mortgage-backed securities (RMBS) it underwrote and sold.

Finra says 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 securitisations. Additionally, Barclays failed to establish an adequate system to supervise the maintenance and updating of relevant disclosure on its website.

Brad Bennett, executive vice-president and chief of enforcement at Finra, says: “Barclays did not have a system in place to ensure that delinquency data posted on its website was accurate; therefore, investors were supplied inaccurate information to assess future performance of RMBS investments.”