WASHINGTON – Piper Jaffray & Co. has agreed to pay a $12,500 fine after the Financial Industry Regulatory Authority found it submitted 23 disclosure documents related to primary offerings late to the Municipal Securities Rulemaking Board’s EMMA system.
Representatives from the Minneapolis-based firm could not be reached for comment. The firm accepted the settlement without admitting or denying FINRA’s findings.
The self-regulator found that the late filings, which violated MSRB Rule G32 on disclosures in connection with primary offerings rules, took place from November 2014 through September 2015. Each of the late filings was related to primary offerings of municipal bonds that Piper Jaffray underwrote.
Of the 23 documents, 12 were official statements, one was an amendment to an official statement, eight were notices for offerings that were exempt under Securities and Exchange Act Rule 15c212 on disclosure, and two were advanced refunding documents. The submissions were filed from one to 27 business days late. The 23 documents represented 2.4% of Piper Jaffray’s submissions to EMMA during FINRA’s review period.
MSRB Rule G32(b) requires that the underwriter of a primary offering of municipal securities submit certain documents to EMMA by specified deadlines. Underwriters generally have to submit the official statement linked to the offering within one business day after receiving it and at the latest by the transaction closing date.
If Rule 15c212 exempts the offering and an official statement won’t be created, the underwriter must submit a notice divulging that information along with the preliminary official statement by the closing date. If there is no preliminary official statement prepared, the underwriter must give notice of that fact.
Additionally, the rule states that if a primary offering advance refunds outstanding munis and an advanced refunding document is prepared, the underwriter must submit that document and certain other information within five business days after the transaction’s closing date.
FINRA found that Piper Jaffray’s late filings that violated those provisions were because of turnover in the staff of the department that was responsible for submitting documents to EMMA.
The firm did not have written policies and procedures that adequately addressed the possible effect of turnover on EMMA submissions and thus also violated MSRB Rule G27 on supervisions, FINRA said.
Piper Jaffray has since modified its written supervisory procedures and its supervisory system generally with regard to instructions about the process for submitting documents to EMMA, among other steps, according to FINRA.
The Bond Buyer
By Jack Casey
August 29, 2016