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

Return to Archive

TESTIMONIALS

Previous
Next

I am so blessed to have you and your dynamic team defending me. Your ethics, forward thinking and strategies are amazing.  You guys are the best group of attorneys in the country that I could hire to handle this complicated case.

Cindy C.

LATEST NEWS AND ARTICLES

October 2, 2024
SEC Charges Two South Florida Men for Defrauding Venezuelan-American Investors in $5 Million Scheme

The Securities and Exchange Commission (SEC) has filed a complaint against two South Florida men, Francisco Javier Malave Hernandez and Ricardo Javier Guerra Farias, for orchestrating a multi-million dollar investment fraud that targeted members of the Venezuelan-American community.

October 1, 2024
California Advisor Suspended and Fined for Churning Client Accounts

A veteran advisor in Santa Maria, California, Stewart "Paxton" Ginn, has been suspended for 18 months and fined $50,000 by FINRA, according to AdvisorHub

September 30, 2024
Bank of America and Merrill Lynch Settle with FINRA for Supervisory Failures

Bank of America and its subsidiary, Merrill Lynch, have agreed to a $3 million fine and censure as part of a settlement with FINRA over long-term supervisory failures.