The National Association of Securities Dealers today announced that it censured and fined Wells Fargo Securities LLC and its former director of research for failing to disclose that the lead analyst on a research report had accepted a job with a company that was the subject of the report.

The firm fined Wells Fargo US$250,000, and imposed a US$40,000 fine and 60-day supervisory suspension against its former director of research, Douglas van Dorsten, for failing to disclose in a research report that the lead analyst on the report had accepted a job at Cadence Design Systems, a company that was the subject of the report.

The regulator also announced that it filed a complaint against Jennifer Jordan, the former Wells Fargo research analyst, for failing to disclose in a series of three research reports that she was pursuing employment and then had accepted a job with Cadence, which was the subject of all three reports. As part of her compensation package with Cadence, Jordan was to receive 15,000 shares of Cadence stock, along with the option to purchase an additional 75,000 shares, once she started working at Cadence.

Wells Fargo and van Dorsten neither admitted nor denied the findings, but consented to the entry of NASD’s findings. The complaint against Jordan has yet to be adjudicated, nothing has been proven against her.

“The actions announced today should remind brokerage firms and research analysts of the importance of full disclosure of conflicts of interest in research reports,” said James Shorris, NASD executive vice president and head of enforcement, in a news release. “There is no doubt that, where a research analyst is pursuing employment or has accepted a job with a covered company, NASD rules require that information concerning such a clear conflict of interest must be disclosed in research reports.”