SEC Fines Brokerage Edward Jones $20 Million For Overcharging Municipal Bond Customers

By Francine McKennaMarketWatch Pulse

The Securities and Exchange Commission announced Thursday that brokerage firm Edward Jones will pay more than $20 million and the former head of its municipal underwriting desk will pay $15,000 to settle charges they overcharged municipal bond customers. Trader Stina R. Wishman, who the SEC alleges took new bonds into Edward Jones' own inventory and improperly offered them to customers at higher prices, will also be barred from working in the securities industry for at least two years. It's the SEC's first case against an underwriter for pricing-related fraud in the primary market for municipal securities. Edward Jones customers paid at least $4.6 million more than they should have for new municipal bonds. The firm was also charged with supervisory failures for because its system was not designed to monitor whether the markups it charged customers for certain trades were reasonable.

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