Broker-Dealer Fined for Failing to Disclose Markups on Debt Securities

A broker dealer settled FINRA charges for failing to disclose to retail customers markup and markdown information on transactions in debt securities, including municipal securities and corporate and agency debt.

In an Acceptance, Waiver and Consent, FINRA stated that the firm failed to disclose this information on 793 transactions in municipal securities and 344 transactions in corporate or agency debt securities. In addition, FINRA found, based on its 2021 fixed income disclosure review, that the firm's supervisory procedures were deficient.

As a result of the disclosure and supervisory failures, FINRA determined that the firm violated MSRB Rule G-27 ("Supervision") and FINRA Rule 2232 ("Customer Confirmations"), Rule 3110 ("Supervision") and Rule 2010 ("Standards of Commercial Honor and Principles of Trade").

To settle the charges, the firm agreed to (i) a censure and (ii) a $100,000 of which $67,000 related to its municipal securities violations.