The Securities
and Exchange Commission announced today that NASD Regulation
Inc. censured and fined 21 securities firms for violations
of Rule G-36 of the Municipal Securities Rulemaking Board.
At the same time, the Comptroller of the Currency sanctioned
a division of a bank for similar violations.* These
proceedings resulted from a coordinated effort by the SEC,
NASD Regulation, Inc. and the OCC.
Rule G-36 requires firms underwriting municipal
securities offerings to send the official statements from
those offerings to the MSRB within one day of receiving the
information from the issuer, and in no case later than 10
days from the date of the agreement to purchase the
securities. The official statement is then placed in the
Board’s Municipal Securities Information Library, and is
available to the public.
Chairman Arthur Levitt said, “Today’s enforcement
actions are a wake-up call to municipal securities
underwriters. The lapses here are particularly unfortunate
because they are so widespread, involving every category of
municipal underwriter, from national and regional securities
firms to a bank. Rule G-36 is an important investor
protection rule. The requirements of the rule enhance the
quality of disclosure, and improve the overall integrity and
efficiency of the municipal securities market. I hope that
today’s actions will remind market participants that the
information is important and that firms need to have
procedures in place to comply with the MSRB rules.”
The SEC, NASD Regulation Inc., the OCC, the Federal
Reserve Board and the Federal Deposit Insurance Corporation
share responsibility for enforcing the MSRB rules.
# # #
*See attached list
Firms Sanctioned by NASD Regulation, Inc.
Amount
Bear, Stearns & Co. Inc.
$25,000
First of America Securities, Inc.
$10,000
First Southwest Company
$10,000
First Union Capital Markets Corp.
$10,000
Goldman, Sachs & Co. $25,000
J.P. Morgan Securities Inc.
$25,000
Merrill Lynch, Pierce, Fenner & Smith Inc.
$10,000
Miller, Johnson & Kuehn, Inc.
$10,000
Morgan, Keegan & Co., Inc. $10,000
Morgan Stanley & Co., Incorporated
$10,000
Oppenheimer & Co., Inc. $10,000
PaineWebber Incorporated. $25,000
Piper Jaffray Inc. $10,000
PNC Capital Markets, Inc. $10,000
Prudential Securities Incorporated
$25,000
Raymond James and Associates $10,000
Seattle-Northwest Securities Corp.
$10,000
Smith Barney Inc. $25,000
Stone & Youngberg, LLC. $10,000
SunTrust Capital Markets, Inc.
$10,000
Sutro & Co. Inc. $25,000
Bank Sanctioned by OCC Amount
Commerce Capital, a Division of
Commerce Bank, N.A. $10,000