Regulators ordered eight brokerage firms to pay more than $610,000 on Tuesday to settle charges that they improperly traded municipal bonds.
The National Association of Securities Dealers ordered the firms to pay $310,000 in fines and $300,000 in restitution to customers for unfairly pricing bonds. The firms neither admitted nor denied the charges in their settlements.
The largest penalty went to UBS Financial Services Inc., which was fined $100,000 and ordered to pay $100,666 in restitution. Other firms named in the case were First Trust Portfolios, Merrill Lynch Inc., Charles Schwab & Co., Wachovia Securities, Morgan Stanley Inc., Edward Jones and Prudential Equity Group.
The NASD found that some customers had received below-market prices when selling their municipal bonds to the firms, which then resold the securities _ sometimes in the same day _ often at significantly higher prices.
"Unlike a traditional mark-up case involving unfair profits to the dealer, these cases involve dealers who failed to take reasonable steps to obtain fair prices for their customers," said Mary Schapiro, president of regulatory policy and oversight for the NASD.
The NASD is investigating the conduct of other brokers involved in these transactions.