A Westport-based municipal bonds financial advisor has settled with the Securities and Exchange Commission after the regulator charged it with quoting municipal bonds at above-market prices and by facilitating the sale of the bonds at above-market prices that were also unfair and unreasonable on behalf of a customer.
A.G.P./Alliance Global Partners LLC agreed to pay disgorgement of $11,369, prejudgment interest of $2,407.38, and a civil penalty of $100,000.00, according to the SEC. The firm agreed to settle without admitting or denying the SEC’s findings, according to an Oct. 16 SEC statement. The SEC charged the firm with engaging in unfair practices in connection with its municipal securities business.
According to the SEC’s order, between February 2019 and February 2021, Alliance published quotes on a daily basis for between 4,300 and 6,500 different municipal bonds at above-market prices for a customer that was a Sophisticated Municipal Market Professional without independently evaluating the fair market values of the bonds at the time it made the quotations.
Alliance also facilitated sales attributable to the quotes in a principal capacity on 204 occasions without evaluating the prevailing market prices of the bonds. As a result, on 193 occasions, Alliance purchased the bonds from its customer at above-market prices and sold the bonds at higher prices to dealers that, in turn, sold the bonds to investors, or to other dealers that sold the bonds to investors, at even higher prices, according to the SEC.
In at least 51 instances, Alliance paid its customer above-market prices that were unfair and unreasonable and failed to identify these trades as “away from the market” when it reported them to the Municipal Securities Rulemaking Board’s Real-Time Transaction Reporting System for display on the MSRB’s Electronic Municipal Market Access platform, the SEC said.
Alliance consented to the SEC’s cease-and-desist order censuring the firm and finding that it violated MSRB Rules G-13, G-14, G-17, G-27 and G-30 and Section 15B(c)(1) of the Securities Exchange Act.
According to the SEC order, Alliance must pay the civil penalty to the SEC within 10 days of the order, of which $41,667 shall be transferred to the MSRB and the remaining $58,333 shall be transferred to the general fund of the U.S. Treasury.
