Four Wall Street firms are paying $5 million each in fines and restitution to investors they allegedly overcharged for corporate bonds under settlements with securities regulators announced Wednesday.
The National Association of Securities Dealers, the brokerage industry’s self-policing organization, announced the civil penalties against Citigroup, Deutsche Bank, Goldman Sachs and Miller Tabak Roberts Securities.
The four firms neither admitted to nor denied the allegations in their settlements with the NASD on trading in high-yield corporate bonds, which call for them to pay a total of around $18.5 million in fines and some $1.4 million in restitution.
The NASD and the Securities and Exchange Commission have been examining whether big Wall Street firms engaged in deceptive or unfair practices in the $200 billion market for corporate and municipal bonds, which increasingly has been drawing ordinary investors. The violations allegedly occurred from 2000 through early 2002.
Under the accords, Citigroup is paying around $486,000 in restitution to investors, Deutsche Bank is paying $422,000, Goldman Sachs $344,000 and Miller Tabak Roberts $182,000. The remainder is being paid as fines.
The firms also were ordered to revamp within 60 days their written control procedures for so-called “junk” bond sales and purchases.