The Financial Industry Regulatory Authority is sanctioning J.P. Turner & Co. for violating a rule mandating that brokers must make sure that municipal securities transactions between a customer’s account and the firm’s account occur at a price that is “fair and reasonable.” The SRO contends that the firm’s supervisory system did not provide the kind of supervision that could achieve compliance with securities regulations involving fair pricing
As part of the settlement, J.P. Turner will pay a $140K fine and over $76K plus interest in customer restitution.
The brokerage firm will also pay a $75k fine related to the ongoing use of a third-party telemarketer, which continued after it made the decision to stop using the marketing firm. Because the telemarketer stopped getting a do-not-call list from the firm, it continued to call people on the registry.
J.P. Turner agreed to settle both cases without denying or admitting to the charges.
In other news, the Securities and Exchange Commission is charging and fining 14 muni bond underwriting firms for issuing inaccurate information to investors. Collectively, the firms will pay about $4.58M for federal securities law violations that purportedly occurred between ’11 and ’14. The alleged violations involved the sale of municipal debt that used offering documents with materially false statements or omissions about borrower compliance as they pertain to disclosure duties. The SEC said that the firms did not perform proper due diligence to identify issues before selling the bonds.Barclays Capital Inc. (BARC), which will pay $500K, Wells Fargo Bank (WFC) N.A. Municipal Products Group, which will pay $440K, Jefferies LLC (JEF), which will pay $500K, and TD Securities USA LLC, which will pay $500K.
The SEC, has been cracking down on underwriting firms and state and local borrowers in an effort to get them to voluntarily admitted to investor disclosure lapses in return for more favorable settlement terms, To date and using its voluntary self-reporting system, the SEC has charged 72 underwriters. The Commission charged 22 firms in September and 36 in June.
SEC Fines 14 Firms for Muni Bond Violations, Think Advisor, February 2, 2016
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