Drexel Hamilton to pay $1.1M, four employees fined for ‘flipping’ municipal bonds
By 
Aaron Nicodemus2024-11-19T21:05:00
New York-based investment firm Drexel Hamilton will pay more than $1.1 million in penalties, with four current and former employees paying fines as well over committing hundreds of violations of rules regarding the sale of municipal bonds.
The Financial Industry Regulatory Authority (FINRA) said in a disciplinary action issued Monday that from 2016-18, Drexel Hamilton disregarded rules on sale of municipal securities related to ensuring that the orders were associated with retail customers. The firm will pay a $300,000 fine and disgorge more than $837,000 in ill-gotten gains.
According to FINRA, municipalities issuing new bonds often create rules that incentivize purchases by retail customers, and those living in the jurisdiction of the municipality, because those investors are more likely to hold the bonds rather than quickly resell them.
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