SEC Commissioner Speaks Out about Lack of Bond Oversight

According to FA-Magazine, the commission of the SEC, Luis Aguilar, made claims that retail investors are often victim to higher markups in the municipal bond market compared to institutional investors.

According to Aguilar, retail investors paid more that $10billion in excessive markups and markdowns between 2005 and 2013.

Aguilar also claimed that retail investors in municipal bonds are victimized by a lack of transparency, higher markups than for institutional investors, and the SEC’s inability to regulate public offerings by issuers.

According to the commissioner, “Retail investors lack access to reliable price information about the municipal securities they may want to buy or sell. As a result, it is exceedingly difficult for retail investors to determine if the prices they are offered and the fees they are charged by their brokers are reasonable.”

The problem will not be an easy one to fix. Aguilar suggests that the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board require broker dealers to disclose markups before executing trades for investors.

If your broker failed to adequately disclose the markups associated with of investing in bonds, you may be able to recover your losses through a FINRA arbitration claim.

For a free consultation with a securities attorney, please call The White Law Group at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.

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