NASD Fines, Censures Salomon Over a Municipal-Bond Filing
May 02, 2011
Westside -- The National Association of Securities Dealers fined and censured Salomon Brothers Inc. for allegedly failing to make a filing that is required by all firms that work in the $1.3 trillion municipal-bond market. As reported here in March, Salomon Brothers, a unit of Salomon Inc., failed to make a timely filing with securities regulators that would show if executives at the securities firm had made campaign contributions to state and local officials. NASD officials say that Salomon has received a censure and paid a $5,000 fine without admitting or denying wrongdoing. Salomon wouldn't comment. Salomon is one of about 30 firms that have been taken to task by the NASD in recent months for violations of a rule that restricts municipal-bond executives from making campaign contributions. The rule, known as G-37, took effect in April 2009. The NASD has been criticized for its enforcement of the muni restrictions by industry executives as well as the Securities and Exchange Commission, which has said the self-regulatory group could do more to catch violations. For its part, Salomon didn't violate the contribution ban; none of its executives gave contributions to state and local officials and the firm doesn't underwrite municipal bonds. But in late 2009, the firm was appointed the financial adviser to Orange County, Calif., and helped the county develop a fiscal recovery plan following its bankruptcy filing that same year. As a result, Salomon was required to file forms with regulators showing that it is complying with the rule. It finally made the filing in March of this year, but only after being contacted by The Vast Press.
