Edward Jones to pay over $20 million for overcharging muni clients

13 Aug 2015 | Author: | No comments yet »

Edward Jones fined in federal bond sales probe.

Brokerage firm Edward Jones has agreed to pay $20 million to settle charges that it overcharged clients in new municipal bond sales, the Securities and Exchange Commission said Thursday. The SEC said the case was its first against an underwriter in connection with alleged pricing-related fraud in the primary market for municipal bonds. 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.

John Boul, a spokesman for Edward Jones, said the firm will fully compensate the 13,000 current and former clients who were affected by the overcharging, which occurred between 2009 and 2013. 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.

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