FINRA has fined New York City brokerage firm Bishop, Rosen & Co., Inc. $32,500 for municipal bond fraud. Bishop Rosen also was required to pay restitution to customers. FINRA found that Bishop Rosen charged unfair prices to customers who bought municipal bonds and paid unfairly low prices to investors who sold municipal bonds. FINRA further found that Bishop Rosen’s supervisory system failed to detect and prevent the municipal bond fraud. Unfair municipal bond trades, resulting from unfair bond mark ups and mark downs, has received increased regulatory attention. This form of securities fraud can be very difficult for investors to detect, making it much easier for brokerage firms to get away with this form of misconduct.
A recent study has found that this billions of dollars of this form of municipal bond fraud has taken place over the past decade, costing investors billions of dollars. The difficulty in detecting this fraud prevents many investors even from realizing they are being gouged. A thorough analysis of your each bond trade often is necessary to determine if you were a victim of unfair bond pricing. Investors with sizeable bond portfolios should seek the advice of a securities lawyer to determine whether they have been charged unfairly for bond trades. Damages resulting from such unfair bond pricing can be pursued against the brokerage firm through FINRA arbitration.