Boston-based Canaccord Genuity - fka Canaccord Adams - settled FINRA charges it failed to adequately comply with NASD Rule 2711, Research Analysts and Research Reports.  FINRA found alleged violations and deficiencies, including the following:

Written Supervisory Procedures.   The WSPs was found to include some relevant procedures:  (i) that all public appearances by firm analysts be approved by the research director;  (ii) that appropriate disclosures be made to the media outlet;  (iii)  that a record documenting the disclosures provided to the media be maintained; and, (iv) that the firm’s marketing department receive a copy of such disclosure.  The WSP's also made the research analyst responsible for meeting these obligations. 

However, the WSP's didn't provide employees with specific steps needed to take to achieve compliance with Rule 2711. It provided little or no guidance on how these tasks could be successfully carried out or supervised. For example:

• procedures contained provisions broadly describing what portions of draft research reports could and could not be provided to covered companies - but it failed to provide specific guidance re: the manner in which these requirements were to be fulfilled.

• WSP procedures permitted the research department to send sections of a research report to a subject company before publication to verify the accuracy of information in those sections, provided that a complete draft of the research report was first provided to the compliance department - but research report excerpts were sent to a subject company before the compliance department had received a complete draft of the report and, in one of those instances, the complete draft was not sent to the compliance department.
  

• in connection with public appearances by its research analysts, the firm failed to retain records that were sufficient to demonstrate compliance by those analysts with the disclosure requirements of NASD Rule 2711(h).

FINRA Sanctions.   Canaccord Genuity was fined $22.5K.  It also had to review its supervisory system and procedures for research reports and supervision of research analysts and correct all deficiencies.  This was done by certifying in writing within 90 days that the firm completed such review and that it currently has in place systems and procedures reasonably designed to achieve compliance with those rules, laws and regulations.   This is FINRA Case #2009016251601.   [Disciplinary Actions for June 2011.]