Washington

The Financial Industry Regulatory Authority fined two firms $55,000 for muni trade rule violations and suspended a former broker, as well as fined him to pay $5,000 in fines and ordered him to disgorge $2,837 of ill-gotten gains plus interest, for making unsuitable municipal securities recommendations to clients.

The Municipal Securities Rulemaking Board has filed with the Securities and Exchange Commission a proposed rule governing the core conduct of municipal advisors, including their fiduciary duty to put the interests of state and local government clients ahead of their own.

Municipalities are getting themselves into trouble by borrowing to cover operating deficits, Federal Reserve Bank of New York president and chief executive officer William Dudley told attendees at a closed-doors workshop Tuesday.

The Bond Dealers of America is stepping up its educational efforts on regulation and electronic trading as well as trying to increase its connections on Capitol Hill, said new BDA board chairman Steve Genyk.

Two divisions of Morgan Stanley have agreed to be censured and pay $675,000 to settle Financial Industry Regulatory Authority charges that the dealers misrepresented taxable municipal bond interest paid to customers as tax-exempt.

The Securities Industry and Financial Markets Association announced that it has developed model sophisticated municipal market professional, or SMMP, documentation to allow firms to comply with muni rules when dealing with investors who need less regulatory protection.

Nine large public pension funds, including those from New York and Connecticut, have asked the SEC to strengthen the disclosure of corporate board diversity.

The municipal advisory business has exploded over the past 30 years, as economic, regulatory, and technological developments have combined to create a bigger business that is increasingly dominated by firms focused mostly on MA services.

The Securities and Exchange Commission’s revised estimates of the burden of complying with its main disclosure rule still inaccurate, the Securities Industry and Financial Markets Association told the commission in a new letter.

A federal appeals court will hear oral arguments May 15 in the case of three convicted bid riggers seeking to have their convictions overturned.