The U.S. Securities and Exchange Commission alleged that 36 underwriters, including Wall Street’s biggest banks, sold bonds for municipalities that failed to make adequate financial disclosures to investors.
Bloomberg News reports that Bank of America’s Merrill Lynch unit, Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley settled with the SEC and will each pay $500,000, according to a statement released Thursday.
The SEC said they were negligent because the offering documents for deals they sold contained false information or material omissions about borrowers’ compliance with the law.
The $9.3m of penalties are the first against underwriters to result from an offer of leniency the agency extended to banks and localities that self-reported running afoul of securities rules. It’s part of a years-long push to crack down on borrowers in the $3.6tril municipal-bond market that fail to provide key information to investors.
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