13 Firms Fined for Improper Puerto Rico Junk Bond Sales

Posted on November 13th, 2014 at 8:23 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

The SEC sanctioned 13 firms for selling Puerto Rico junk bonds to investors below a “minimum denomination set”.
Generally, all municipal bond offerings include a “minimum denomination”, which establishes the smallest amount of the bonds that a dealer firm is allowed to sell an investor in a single transaction. “Junk bonds” that have a higher default risk often set a higher minimum denomination.

Because retail investors tend to purchase securities in smaller amounts, this minimum denomination standard helps ensure that dealer firms sell high-risk securities only to investors who are capable of making sizeable investments and more willing and able to bear the higher risk associated with the bonds.

The SEC Enforcement Division’s Municipal Securities and Public Pensions Unit detected improper sales of Puerto Rico junk bonds below a $100,000 minimum denomination set in a $3.5 billion offering earlier this year , and identified the following thirteen firms behind those improper sales:: Charles Schwab & Co., Hapoalim Securities USA, Interactive Brokers LLC, Investment Professionals Inc., J.P. Morgan Securities, Lebenthal & Co., National Securities Corporation, Oppenheimer & Co., Riedl First Securities Co. of Kansas, Stifel Nicolaus & Co., TD Ameritrade, UBS Financial Services, and Wedbush Securities.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: SEC, Municpal Securities, Public Pensions Unit

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I just received this letter from the CFP Board. Thank you, Thank you, THANK YOU!

David Y


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