SEC Prosecutions

SEC Prosecutions

Settlement with 15 Broker-Dealer Firms for Violative Practices in the Auction Rate Securities Market

In the Matter of Bear, Stearns & Co., Inc., Citigroup Global Markets, Inc., Goldman Sachs & Co., J.P. Morgan Securities, Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and Morgan Stanley DW Inc., RBC Dain Rauscher Inc., Banc of America Securities LLC, A.G. Edwards & Sons, Inc., Morgan Keegan & Company, Inc., Piper Jaffray & Co., SunTrust Capital Markets Inc., and Wachovia Capital Markets, LLC

  • 2006
  • $13.4 Million

The SEC charged the respondent broker-dealer firms with auction practices that favored certain customers over others, or that had the effect of favoring the issuer over customers, or vice versa. This conduct included, for example: (i) allowing customers to submit or change orders, after auction deadlines; (ii) not requiring certain customers to purchase partially-filled orders even though the orders were supposed to be irrevocable; (iii) having an express or tacit understanding to provide certain customers with higher returns than the auction clearing rate; and (iv)providing certain customers with information that gave them an advantage over other customers in determining what rate to bid. The combined sanction of approximately $13 million was relatively light in observance of respondents’ cooperation.

Named one of the top whistleblower practices/attorneys in the country by The New York Times, Wall Street Journal, NPR and The New Yorker
Thank you for submitting some email to us.