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FINRA bars former Goldman Sachs research analyst Brian Maguire



The Financial Industry Regulatory Authority (FINRA) has announced barring former Goldman Sachs & Co. research analyst Brian Maguire for insider trading. FINRA fond that Maguire purchased securities twice after he learned a fellow analyst was upgrading his recommendation in upcoming research reports. He also lied to FINRA staff about his trading.

Jessica Hopper, Executive Vice President and Head of FINRA’s Department of Enforcement, commented:

Jessica Hopper, FINRA
Jessica Hopper
Source: LinkedIn

Insider trading by securities industry professionals erodes the public trust in our capital markets. FINRA utilizes sophisticated surveillance tools to detect and remediate this type of misconduct. Ensuring market integrity is one of FINRA’s core missions and weeding out misconduct from within the industry will always be a priority for FINRA.

The purchase or sale of a security of any issuer on the basis of material nonpublic information is prohibited under US federal law.

finra

The US watchdog found that in April and June last year, Maguire bought shares of two companies in undisclosed accounts after learning important information not yet open to the public. He received internal emails revealing that the research analyst covering those companies was upgrading his recommendation from “Neutral” to “Buy” in upcoming research reports. Maguire bought the shares after learning that the upgrades were approved, but before the research reports announcing those upgrades were published.

According to FINRA, Maguire also traded securities of issuers that he covered in breach of firm policy which prohibits such trading and sold securities when he had a buy recommendation in his latest research report. Maguire also avoided disclosing that a member of his household had a financial interest when he wrote his research reports which is in violation of FINRA rules. Moreover, he also failed to disclose the accounts in which he traded to Goldman Sachs or seek approval for the trades beforehand, as required by procedures at the firm.

During the investigation, Maguire also lied in his testimony about trading in the undisclosed accounts and trading the securities of issuers that he and his business unit covered. Maguire consented to the entry of FINRA’s findings without admitting nor denying the charges.


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FINRA bars former Goldman Sachs research analyst Brian Maguire

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