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Royal Bank of Canada to Pay Fine Over Municipal Bonds Charges by SEC

By Adriano Marchese


Royal Bank of Canada has agreed to pay $800,000 to resolve a charge that it was engaged in unfair dealing in municipal-bond offerings, the U.S. Securities and Exchange Commission said on Friday.

The regulator said RBC improperly allocated bonds intended for institutional customers parties that would buy and then resell bonds--known as flipping--to other broker-dealers at a profit over a period of nearly four years.

"In addition, the order finds that, in three instances where an issuer had instructed RBC to place retail customer orders first, RBC violated those instructions by allocating bonds to flippers ahead of orders for retail customers," the SEC said.

Among the findings, the regulator said RBC knew or should have known that flippers weren't eligible for retail or institutional priority and it would violate RBC's internal priority policy on those bonds in primary offerings.

RBC has consented to a public administrative and cease-and-desist order that finds it had violated the rules, but it has neither admitted nor denied the findings.


Write to Adriano Marchese at


(END) Dow Jones Newswires

September 17, 2021 10:03 ET (14:03 GMT)

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