Bonds Archives - Page 4 of 4 - The Frankowski Firm

Edward Jones To Pay $20M For Bond Overcharges

Edward D. Jones & Co. will pay $20 million to settle allegations by the Securities Exchange Commission that the firm overcharged its retail customers on new municipal bond sales. The SEC claims that between 2009 and 2012 Edward Jones allegedly overcharged its clients by $4.6 million at minimum by offering the bonds at a higher price than required by securities laws. By rule, new bonds must be sold to customers at an initial offering price that is negotiated with the bond issuer. However, instead of offering these bonds at the negotiated price, Edward Jones is accused of bringing the bonds into its own inventory and later offering them at higher prices, sometimes even after the bonds had already begun to trade in the secondary market. The SEC claims Edward Jones was "at least negligent" regarding the overcharges. The SEC further stated, “Their conduct was inconsistent with industry standards for, and written agreements governing, municipal underwriting.” Edward Jones agreed to the settlement [...]

Broker-Dealers Fined for Wrongful Bond Trades

The SEC charged nearly two dozen companies and individuals who bought and sold securities for a Chicago-based trading firm without registering as a broker-dealer with the SEC as required under the federal securities laws. The securities laws regulating broker-dealer registration ensure the protection of investors by allowing the SEC to conduct periodic inspections of firms and requiring firms to maintain books and records for all securities transactions. An SEC investigation uncovered Global Fixed Income, LLC, which primarily purchased investment grade corporate bonds, entered into contracts with third parties who worked as unregistered broker-dealers. The unregistered brokers bought billions of dollars’ worth of newly issued bonds which caused Global Fixed Income’s allocation in the bond offerings to increase. Because the offerings were oversubscribed, Global Fixed Income could sell the bonds quickly for a profit compared to the dollar value of the trade. This wrongful profit was split among Global Fixed Income and the third-party unregistered broker-dealers. The parties committed this misconduct [...]

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