Edward Jones to Pay $20 Million to Settle SEC Municipal Bond Charges

14 Aug 2015 | Author: | No comments yet »

Edward Jones fined in federal bond sales probe.

Louis • Federal regulators say brokerage firm Edward Jones has agreed to pay more than $20 million to settle claims it overcharged customers in new municipal bond sales.

The SEC says the ex-chief of Edward Jones’ municipal bond underwriting desk, Stina Wishman, will pay $15,000 and be barred from working in securities for at least two years. Investors paid at least $4.6 million more than they should have, the SEC said in a statement Thursday. “The integrity and efficiency of the municipal securities market is critical to state and local governments,” Andrew Ceresney, director of the SEC’s enforcement division, said Thursday in a conference call with reporters. “The actions filed today shine a light on areas of the market that have traditionally had little enforcement attention.” Edward Jones will pay $20 million, including $5.2 million in disgorgement and interest. It alleged in June that 36 underwriters, including some of the largest U.S. banks, sold bonds for localities that failed to make adequate financial disclosures to investors. From 2009 to 2012, Edward Jones didn’t offer or attempt to offer new bonds to its customers at the initial offering price, allowing the firm to mark up the securities, Ceresney said.

The firm now discloses both the percentage and dollar amount of markups on fixed-income trade confirmations among individual investors, according to the SEC statement. “The SEC expressly acknowledges that we’ve taken positive steps to correct the past practices and generally to enhance the operation of the municipal-bond area,” John Boul, a spokesman for Edward Jones, said in an interview. “We’re happy the matter is resolved and behind us.”

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