Securities regulators fined 15 brokerages more than $13 million for trading violations in the so-called auction rate bond market.
An auction rate bond is a security that carries an interest rate that periodically resets itself based on market prices. The violations uncovered by the
Securities and Exchange Commission
involved both municipal and corporate bonds.
The regulators, in settling with all of the firms, said the violations "had the effect of favoring certain customers over others." Other violations put customers at a disadvantage to the issuer of the bonds.
All the firms settled the investigation with neither admitting nor denying liability. In calculating the fines, the SEC said it took into consideration the cooperation of the firms in quickly resolving the matter.
The firms settling with the SEC include
J.P. Morgan Chase