The U.S. Securities and Exchange Commission alleged that two firms committed fraud by snapping up municipal bonds floated in new debt offerings and quickly unloading them for a profit.
The agency Tuesday alleged that from at least 2009 to 2016, Core Performance Management, RMR Asset Management Co., their principals and certain associates, misrepresented their identities to get newly issued bonds that were supposed to be sold to individual investors and then reselling, or "flipping" them, to broker-dealers at higher prices.
The SEC said an employee of one underwriter, NW Capital, received "kickbacks" for participating.
"More than a dozen of the individuals charged today are alleged to have engaged in plainly deceptive conduct," said Stephanie Avakian, co-director of the enforcement division. "We are committed to investigating and charging individuals, especially where, as here, the alleged misconduct by many of these industry professionals harmed retail investors."
Core Performance and managing director James P. Scherr, RMR and its president, Ralph Riccardi, and 13 of their associates settled the SEC's charges without admitting or denying the allegations, the SEC said in a statement. NW Capital also settled without admitting or denying the charges.