SEC Charges 36 Firms in Bond Violations; First Against Underwriters in Muni-Bond Disclosure Initiative

Recently, the Securities and Exchange Commission (SEC) announced enforcement actions taken against the following 36 municipal underwriting firms for violations in municipal bond offerings. The cases are the first brought against underwriters under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents.

In the SEC's actions, the SEC alleges that from 2010 and 2014 the 36 firms violated federal securities laws by selling the municipal bonds using documents contained materially false statements or omissions about the bond issuers’ compliance with continuing disclosure obligations. The underwriting firms also allegedly failed to conduct adequate due diligence.

Firms and Penalty Amounts:

• The Baker Group, LP – $250,000

• B.C. Ziegler and Company – $250,000

• Benchmark Securities, LLC – $100,000

• Bernardi Securities, Inc. – $100,000

• BMO Capital Markets GKST Inc. – $250,000

• BNY Mellon Capital Markets, LLC – $120,000

• BOSC, Inc. – $250,000

• Central States Capital Markets, LLC – $60,000

• Citigroup Global Markets Inc. – $500,000

• City Securities Corporation – $250,000

• Davenport & Company LLC – $80,000

• Dougherty & Co. LLC – $250,000

• First National Capital Markets, Inc. – $100,000

• George K. Baum & Company – $250,000

• Goldman, Sachs & Co. – $500,000

• Hutchinson, Shockey, Erley & Co. – $220,000

• J.P. Morgan Securities LLC – $500,000

• L.J. Hart and Company – $100,000

• Loop Capital Markets, LLC – $60,000

• Martin Nelson & Co., Inc. – $100,000

• Merchant Capital, L.L.C. – $100,000

• Merrill Lynch, Pierce, Fenner & Smith Incorporated – $500,000

• Morgan Stanley & Co. LLC – $500,000

• The Northern Trust Company – $60,000

• Oppenheimer & Co. Inc. – $400,000

• Piper Jaffray & Co. – $500,000

• Raymond James & Associates, Inc. – $500,000

• RBC Capital Markets, LLC – $500,000

• Robert W. Baird & Co. Incorporated – $500,000

• Siebert Brandford Shank & Co., LLC – $240,000

• Smith Hayes Financial Services Corporation – $40,000

• Stephens Inc. – $400,000

• Sterne, Agee & Leach, Inc. – $80,000

• Stifel, Nicolaus & Company, Inc. – $500,000

• Wells Nelson & Associates, LLC – $100,000

• William Blair & Co., L.L.C. – $80,000

If you or a family member sustained investment losses due to your stock broker or financial advisor’s recommendations in municipal bonds, call for a no-cost consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.