FINRA Fines Two Firms $31,000

WASHINGTON - The Financial Industry Regulatory Authority fined two firms a total of $31,000 dollars for violations of municipal securities rules, FINRA disclosed in the September monthly disciplinary actions it released Monday.

St. Louis, Mo.-based Edward Jones received a $16,000 fine for violating the Municipal Securities Rulemaking Board's Rule G-17 on fair dealing and G-30 on prices. FINRA examiners found that between Jan. 1 and March 31 of 2011, Edward Jones bought from or sold bonds to customers at prices that were not fair and reasonable when taking markups and markdowns into account. The conduct occurred on 10 occasions during that timeframe, FINRA alleged, constituting separate violations of the two MSRB rules.

The firm agreed to the fine without admitting or denying FINRA findings, and also agreed to pay $6,391.60 in restitution to the customers affected. The firm did not respond to a request for comment.

FINRA slapped Walnut Creek, Calif.-based Westhoff Cone & Holmstedt with a $15,000 penalty for violating several MSRB rules when it either failed to file or did not file timely official statements to EMMA between Jan. 15, 2010 and July 16, 2012. Since 2009 MSRB rules have required dealers to file official statements to EMMA, but FINRA found that the firm failed to do so at all for 14 transactions and did not file on time for seven other deals.

FINRA further found that during that time, that WCH had a deficient supervisory system in place and designated an individual to be in charge of compliance who was never registered as a municipal securities principal as required by MSRB Rule G-3 on classification of principals and representatives. FINRA declined to identify the individual other than by his initials, "JT." A municipal market directory shows Jason Tripp is the firm's head of compliance

The firm's conduct also violated Rules G-27 on supervision and G-32 on primary offering disclosures, FINRA alleged. The firm accepted the fine without admitting or denying FINRA's findings, and did not want to comment on the matter.

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Enforcement Law and regulation
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