Royal Bank of Canada to Pay Fine Over Municipal Bonds Charges by SEC
September 17 2021 - 10:18AM
Dow Jones News
By Adriano Marchese
Royal Bank of Canada has agreed to pay $800,000 to resolve a
charge that it was engaged in unfair dealing in municipal-bond
offerings, the U.S. Securities and Exchange Commission said on
Friday.
The regulator said RBC improperly allocated bonds intended for
institutional customers parties that would buy and then resell
bonds--known as flipping--to other broker-dealers at a profit over
a period of nearly four years.
"In addition, the order finds that, in three instances where an
issuer had instructed RBC to place retail customer orders first,
RBC violated those instructions by allocating bonds to flippers
ahead of orders for retail customers," the SEC said.
Among the findings, the regulator said RBC knew or should have
known that flippers weren't eligible for retail or institutional
priority and it would violate RBC's internal priority policy on
those bonds in primary offerings.
RBC has consented to a public administrative and
cease-and-desist order that finds it had violated the rules, but it
has neither admitted nor denied the findings.
Write to Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
September 17, 2021 10:03 ET (14:03 GMT)
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