Monday, November 25, 2013

FINRA Tags St. Louis Bond Underwriter for Improper Sports Ticket Gifting

FINRA recently accepted the offer of settlement of a St. Louis member firm. The uncontested offer of settlement was submitted approximately 9 months after FINRA's Department of Enforcement filed its Complaint. Enforcement accused the firm of improperly gifting tickets to various sporting events to employees of municipal securities issuers. The firm gifted over $2,000 tickets valued at almost $200,000 in a two-year period.

In concluding that the firm violated MSRB Rule G-27, FINRA emphasized three salient factors: 1) the firm did not host the recipients of the tickets at the events, 2) the firm gifted tickets only to those issuers who were clients, and 3) the bigger issuers received more and better tickets. MSRB Rule G-20 has an exemption for occasional gifts of tickets that requires the member firm to host the event. As a result, the St. Louis firm was censured and fined $200,000. Food for Thought! Go to the game!

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