Finra fines Barclays over recordkeeping

December 26, 2013
REGULATION
Finra fines Barclays over recordkeeping

The Financial Industry Regulatory Authority said Thursday that it fined Barclays Capital almost $4 million for what it called “systemic failures” in retention of records.

Finra, the largest independent regulator for securities firms doing business in the United States, fined the London-based bank $3.75 million after an investigation found that the firm did not preserve electronic records, e-mails and instant messages for the required minimum 10 years.

The group said that from 2002 to 2012, Barclays failed to save many of these electronic records — including order and trade ticket data, trade confirmations, account records, and other items — in the proper format.

Finra investigators said the issues were widespread and included all of the firm’s business areas.

“Ensuring the integrity, accuracy and accessibility of electronic books and records is essential to a firm’s ability to meet its compliance obligations,” Brad Bennett, Finra’s chief of enforcement and executive vice president, said in a statement.

— Los Angeles Times

LEGAL
Investors sue over Empire State IPO

Investors in the Empire State Building have filed a lawsuit accusing the real estate magnates who took it public of shortchanging them $300 million by refusing to sell the iconic skyscraper at a premium price.

According to a complaint filed Tuesday in a New York state court in Manhattan, Peter Malkin and his son Anthony put their interests ahead of the building’s investors by spurning all-cash offers of as much as $2.3 billion for the building and $1.4 billion for Empire State Building Associates (ESBA), which held the title and master lease.

Instead, the Malkins put the landmark building and 17 other properties into Empire State Realty Trust, whose Oct. 1 initial public offering valued the property at just $1.89 billion and ESBA at just $1.1 billion, according to the complaint.

The lawsuit by plaintiff Marc Postelnek seeks class-action status on behalf of more than 2,800 investors who hold shares in ESBA, which was created in 1961 and was supervised by a Malkin company, Malkin Holdings.

It claimed the Malkins acted in bad faith by aborting a “bidding war” for the building, and instead enriched themselves by hundreds of millions of dollars through an IPO.

Opened in 1931, the 102-story Empire State Building was the world’s tallest building for about four decades, until it was passed by the original World Trade Center’s north tower.

King Kong climbed the building in a 1933 movie, and Tom Hanks and Meg Ryan finally met there in a climactic scene of the 1993 movie “Sleepless in Seattle.”

Empire State Realty Trust went public at $13 per share. On Thursday, the stock closed at $15.32, down 0.2 percent.

— Reuters

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