WASHINGTON The Financial Industry Regulatory Authority says five of the country's largest banks will pay $4.5 million to settle claims they used municipal and state bond funds to pay lobbyists.
The regulatory agency said Thursday that between 2006 and 2010 Citigroup (C), Goldman Sachs (GS), JPMorgan Chase (JPM), Merrill Lynch (BAC) and Morgan Stanley (MS) made payments to California business lobbying group Cal PSA and requested that those payments be reimbursed as underwriting expenses from the proceeds of municipal and state bond offerings.
FINRA also says the firms did not adequately disclose this nature of the fees to issuers. In doing so, they violated fair dealing and supervisory rules.
The firms neither admitted nor denied the charges as part of the settlement.
FINRA is a regulator for securities firms doing business in the U.S.