WASHINGTON — The Financial Industry Regulatory Authority has fined Raymond James Financial Services Inc. and Neuberger Berman LLC for municipal bond rules violations.
The fines, announced Monday, were $150,000 against Raymond James for supervisory failures related to so-called 529 college savings plans sold to clients and $80,000 against Neuberger Berman for lapses of supervision and timely reporting.
Finra also fined New York-based Beech Hill Securities Inc. $12,500 for failing to report 41 muni trades to the Municipal Securities Rulemaking Board within 15 minutes, as required by the board's Rule G-14 on transaction reporting. The regulator also cited the firm for violating its Rule G-27 on supervision.
The firms and individuals either could not be reached for, or declined to, comment.
Finra said that, from August 2005 through October 2007, St. Petersburg, Fla.-based Raymond James violated Rule G-27 by failing to ensure compliance with internal policies and procedures governing the sale of 529 college savings plans.
In addition, at various times during the review period, the company violated rules G-2 on professional qualifications, G-3 on classification of principals and representatives and G-27 by allowing eight people to function as municipal securities principals while failing to be registered or qualified in such a capacity, Finra said.
In a corrective-action statement, the company said it had "promptly" enhanced enforcement of its internal procedures and noted that it had not gotten any client complaint or request to switch plans in cases when a customer bought an out-of-state 529 plan in a state that offers a tax benefit only for in-state plans.
During three quarters in 2007 and 2008, Finra said, New York-based Neuberger Berman failed to report a significant percentage of muni transactions within the 15 minutes allowed by Rule G-14 covering trade reporting. The transactions in question comprised 17%, 22% and 32.5% of the municipal trades the firm reported to the rulemaking board's Real-time Transaction Reporting System during those quarters.
