Broker-Dealer Fined for Charging Unfair Prices on Bond Transactions
Broker-Dealers
Compliance Operations
May 31, 2024
The Case
FINRA has fined a broker-dealer for charging unfair prices on 62 corporate bond transactions and six municipal bond transactions due to failing to consider the appropriate pricing information to determine the prevailing market price. The firm used inter-dealer bids and offer quotations to determine the prevailing market price when a contemporaneous inter-dealer transaction price was available.
The action also alleges that the firm failed to establish a supervisory system to ensure it was complying with its fair pricing obligations.
Why Does This Matter?
This case reminds us that financial institutions must adhere to fair pricing regulations, observe commercial honor, and develop comprehensive written supervisory policies (WSPs).
InnReg's Experience
As an established outsourced compliance provider since 2013, InnReg has broad experience in assessing, designing, and enhancing WSPs for broker-dealers to enhance compliance and operational efficiency.
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