Twenty-one securities firms were censured and fined by NASD Regulation Inc. for violations of Rule G-36 of the Municipal Securities Rulemaking Board, and a bank division was separately sanctioned by the Comptroller of the Currency, the Securities and Exchange Commission announced. The penalties total $325,000.
The SEC said the proceedings resulted from a coordinated effort by the SEC, NASD Regulation Inc. and the OCC.
What the rule requires
Rule G-36 requires firms underwriting municipal securities offerings to send the official statements from those offerings to the MSRB within one day of receiving the information from the issuer, and in no case later than 10 days from the date of the agreement to purchase the securities, according to the SEC.
The official statement — the disclosure document describing a municipal bond offering — is then placed in the MSRB’s Municipal Securities Information Library and made available to the public.
The penalties
Seven firms were fined $25,000 each: Bear, Stearns & Co. Inc.; Goldman, Sachs & Co.; J.P. Morgan Securities Inc.; PaineWebber Incorporated; Prudential Securities Incorporated; Smith Barney Inc.; and Sutro & Co. Inc.
Fourteen firms were fined $10,000 each: First of America Securities, Inc.; First Southwest Company; First Union Capital Markets Corp.; Merrill Lynch, Pierce, Fenner & Smith Inc.; Miller, Johnson & Kuehn, Inc.; Morgan, Keegan & Co., Inc.; Morgan Stanley & Co., Incorporated; Oppenheimer & Co., Inc.; Piper Jaffray Inc.; PNC Capital Markets, Inc.; Raymond James and Associates; Seattle-Northwest Securities Corp.; Stone & Youngberg, LLC.; and SunTrust Capital Markets, Inc.
Separately, the OCC sanctioned Commerce Capital, a division of Commerce Bank, N.A., in the amount of $10,000.
Commission comment
Chairman Arthur Levitt said, “Today’s enforcement actions are a wake-up call to municipal securities underwriters. The lapses here are particularly unfortunate because they are so widespread, involving every category of municipal underwriter, from national and regional securities firms to a bank. Rule G-36 is an important investor protection rule. The requirements of the rule enhance the quality of disclosure, and improve the overall integrity and efficiency of the municipal securities market. I hope that today’s actions will remind market participants that the information is important and that firms need to have procedures in place to comply with the MSRB rules.”
The SEC, NASD Regulation Inc., the OCC, the Federal Reserve Board and the Federal Deposit Insurance Corporation share responsibility for enforcing the MSRB rules, according to the release.
The release did not state the number of offerings involved, the periods covered by the violations, or whether the firms admitted or denied the findings.
Source: U.S. Securities and Exchange Commission, “Municipal Securities Underwriters Pay a Total of $325,000 in Fines” (press release 97-114), released Dec. 16, 2026. Fine amounts are as listed in the attachment to the release; the page carries a “Last Reviewed or Updated” date of Dec. 1, 2026.