U.S. Securities and Exchange Commission Litigation Release No. 26434, dated December 5, 2025.
The SEC consented to modifying undertakings related to research analyst conflicts of interest for twelve investment banks. These modifications are a result of FINRA Rule 2241, which now addresses similar concerns, and were requested by the settling firms to terminate the original undertakings.
In Plain English
Imagine you promised your friend you'd always tell them if a toy was bad before they bought it. Later, a new rule comes out that says everyone has to do that anyway. So, you and your friend agree to cancel your original promise because the new rule covers it. That's kind of what happened here, but with big banks and rules about how their stock analysts talk about companies.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Original Settlement Undertakings In October 2003 and September 2004, twelve investment banks settled SEC and other enforcement actions. As part of these settlements, they agreed to an 'Addendum' with specific undertakings designed to address potential conflicts of interest between their equity research analysts and investment banking personnel.
- Sunset Provision and Future Modifications The original Addendum included a sunset provision. It stated that if new rules were adopted by the SEC or self-regulatory organizations that superseded these undertakings, those rules would take precedence. For terms not superseded, the SEC agreed to consider amendments or modifications, subject to court approval, unless it was not in the public interest.
- Prior Modification in 2010 The Addendum was previously modified by court order in March 2010. This revision also included a clause allowing for further amendment or modification of the undertakings, again subject to court approval and the public interest standard.
- FINRA Rule 2241 Adoption In 2015, FINRA adopted and implemented Rule 2241, titled 'Research Analysts and Research Reports.' This rule specifically addresses conflicts of interest between research analysts and investment banking personnel within registered broker-dealers, mirroring the concerns covered by the original undertakings.
- Motions to Terminate Undertakings In June and December 2025, the settling firms filed motions seeking to terminate the remaining undertakings from the original Global Research Analyst Settlement. They argued that the adoption and implementation of FINRA Rule 2241 rendered these original undertakings obsolete.
- SEC's Consent to Modification The SEC reviewed these motions and, in its responses, acknowledged the sunset provision and the passage of FINRA Rule 2241. The SEC stated that it 'believes modification of the Judgment is in the public interest' and consented to the requested modifications of the final judgments.
- Court Approval Pending The proposed modifications to the final judgments, to which the SEC has consented, are now subject to court approval. The SEC's consent means they agree that the original undertakings are no longer necessary given the current regulatory landscape established by FINRA Rule 2241.
The Enforcement Action
The Securities and Exchange Commission (SEC) consented to modifications of the October 2003 and September 2004 final judgments against twelve investment banks and two individuals as part of the Global Research Analyst Settlement. These modifications, subject to court approval, address the termination of undertakings related to research analyst conflicts of interest, which are now superseded by FINRA Rule 2241. The SEC's consent was based on the sunset provision in the original judgments and the public interest, as articulated in their responses to the defendants' Rule 60(b) motions filed in June and December 2025.