Articles Tagged with City Securities Corporation

shutterstock_177792281The Securities and Exchange Commission (SEC) announced enforcement actions against 36 municipal bond underwriting brokerage firms for material misstatements and omissions in municipal bond offering documents. The SEC offered favorable settlement terms to municipal bond underwriters and issuers who self-reported securities law violations leading to the settlements.

The SEC alleged that between 2010 and 2014, 36 brokerage and financial firms violated federal securities laws by selling municipal bonds using offering documents that contained materially false statements or omissions about the bond issuers’ compliance with their obligation to disclosure. The firms were also alleged by the SEC to have failed to conduct adequate due diligence to identify the misstatements and omissions before offering and selling the bonds to their customers.

The municipal bond market is a $3.7 trillion market. Continuing disclosure provides municipal bond investors with information about the solvency and financial fitness of issuers on an ongoing basis. The SEC had previously identified issuers’ failure to comply with their continuing disclosure obligations as being a major challenge for investors seeking up to date information about their municipal bond holdings.

shutterstock_145368937The Financial Industry Regulatory Authority (FINRA) fined and suspended broker Leonard Tanner (Tanner) concerning allegations between October 2010, and January 2014, Tanner executed discretionary transactions in approximately 90 accounts of customers under a verbal authorization but without prior written authorization from those customers or approval of his brokerage firm City Securities Corporation (City Securities).

Tanner became a broker with a FINRA firm in 1969. From July 1995 until October 2010, Tanner was associated with PNC Investments. Since October 2010, Tanner has been registered with City Securities.

FINRA alleged that Tanner exercised discretion in executing transactions in the accounts of approximately 90 customers. FINRA found that Tanner received prior verbal authorization from his customers for these transactions for their investment strategies but exercised discretion in executing those transactions. FINRA determined that Tanner did not obtain written authorization from his customers and that City Securities did not approve these accounts for discretionary trading.

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