WASHINGTON — The Financial Industry Regulatory Authority ordered five firms to pay a total of nearly $120,000 in fines and restitution for violations of municipal securities rules.
The violations and sanctions were detailed in FINRA's latest monthly disciplinary report, which was released Friday. The firms agreed to pay fines without admitting or denying the findings.
New York-based Neuberger Berman Group LLC was fined $56,000 for violations of the Municipal Securities Rulemaking Board's Rule G-14 on reports of sales or purchases and Rule G-8 on books and records.
In the second quarter of 2009, the firm failed to report the correct trade times to the MSRB's Real-Time Transaction Reporting System for 166 muni transactions, according to FINRA.
Neuberger Berman also did not document the correct time of execution on memorandums for 127 transactions during the period.
In addition, FINRA said the firm failed to report information on about 1,090 trades to RTRS within 15 minutes in 2009 and 2010.
Spokesperson Alexander Samuelson declined to comment.
FINRA fined Phoenix-based Lawson Financial Corp. $25,000 for buying or selling munis at unfair prices on 21 transactions in September 2008, a violation of Rule G-17 on fair dealing and Rule G-30 on prices and commissions. President and chief executive Robert Lawson said the firm "cooperated fully with FINRA," and has improved its pricing policies.
"The trades in question were a small amount of trades we did for clients during what I consider a catastrophic time period, which was September 2008," he said.
Edward D. Jones & Co., based in St. Louis, was fined $15,000 for the same rule violations. FINRA said the firm bought or sold muni bonds at unfair prices in five transactions June 2007 and five transactions between January and March 2008.
The firm will pay restitution of $6111.90, plus interest.
"The trades at issue date back to 2007, so we are glad to have this matter resolved," said spokesperson Regina Deluca-Imral.
Dallas-based Estrada Hinojosa & Co. was fined $10,000 for failing to properly file official statements and advance refunding documents with the MSRB, violations of Rule G-32 on disclosure and Rule G-27 on supervision.
FINRA said that seven of 71 official statements the firm filed between June 2009 and July 2011 were up to 28 days late, and one official statement amendment was five days late.
In addition, five of 20 advance refunding documents the firm was required to file during the period were never filed and 14 were filed between 19 and 474 days late.
Rule G-32 requires that underwriters submit official statements on EMMA within one business day of receiving the document from an issuer, but no later than the offerings' closing date. They must file advance refunding statements within five business days after the closing of the offering.
FINRA said the firm's written supervisory procedures did not have adequate instructions on filing required documents.
The firm has since improved staff training and oversight, created a compliance checklist and hired a staffer to manage the checklist, FINRA said.
President and CEO Noe Hinojosa said Estrada Hinojosa improved its management processes. In the past, different staffers handled different aspects of a deal; today, the staffer in charge of underwriting also has responsibility for filings, he said.
"We have people who are taking more responsibility, from the moment we do a financing to the end, when we do the filing," he said.
UVEST Financial Services Group Inc. of Charlotte, N.C., was fined $7,500 for violations of Rule G-14 and Rule G-8.
FINRA said the firm failed to report to the MSRB the time of execution for all of the 96 muni trades sampled by FINRA between July 2007 and August 2009. The firm also failed to maintain order memoranda, or maintained inadequate memoranda, for 33 of 48 muni transactions sampled by FINRA.
UVEST did not respond to a request for comment.