SEC Alleges Firms Conspired in ‘Flipping’ Deal With Muni Bonds
- Two investment firms, 18 people charged in bond trading case
- Related SEC case targets former employee of underwriting firm
The U.S. Securities and Exchange Commission (SEC) seal is displayed outside headquarters in Washington, D.C.
Photographer: Andrew Harrer/Bloomberg
The U.S. Securities and Exchange Commission said two investment firms and an underwriter settled charges of conspiring to make quick profits by trading newly issued municipal bonds, a practice known as flipping.
The agency Tuesday said that Core Performance Management LLC, based in Boca Raton, Florida, and Chula Vista, California-based RMR Asset Management Co. used fictitious business names and posed as individual investors to get newly offered securities that were then immediately resold at higher prices. The SEC said the former head of municipal underwriting for NW Capital Markets purchased securities from Core Performance at above-market prices in exchange for a cut of the profits.