15 Firms Fined $13M For Bond Auction Violations

The Securities and Exchange Commission has slapped 15 Wall Street firms with fines of more than $13 million for alleged violations in connection with municipal and corporate bond auctions. The SEC charged that the firms – which include Bear Stearns, Citigroup Global Markets, Goldman Sachs Group, JPMorgan Securities, Lehman Brothers Holdings, Merrill Lynch, Morgan Stanley, Morgan Stanley DE, RBC Dain Rauscher, Banc of America Securities, A.G. Edward, Region Financial Corp.’s Morgan Keegan & Co., Piper Jaffray Cos., SunTrust Capital Markets and Wachovia Capital Markets – with favoring some customers by allowing them to place open or market orders rather than specify prices. In addition, according to the SEC, the firms – which agreed to pay the fine without admitting or denying the charges – requested that customers bid to keep an auction from failing, and allowed customers to submit or change orders after the auction deadline. The individual penalties ranged from $1.5 million to $125,000, and were based on market share and each firm’s conduct.