The United States Securities and Exchange Commission (SEC) on Wednesday announced that it has fined Loop Capital Markets, a Chicago-based investment bank and broker-dealer, $100,000 for violating the regulator’s municipal advisor registration rule.
SEC said it charged the broker-dealer for providing advice to a municipal city in the country without being registered to do so.
The watchdog said Loop Capital Markets neither admitted or denied its findings but agreed to pay the fine. The penalty comes with $5,456.73 in interest for disgorgement and prejudgment.
“The action marks the first time the SEC has charged a broker-dealer for violating the municipal advisor registration rule,” the market supervisor said in a press statement.
According to the regulator, between September 2017 and February 2019, Loop Capital Markets advised a city in the Midwest of the United States to invest in certain fixed income securities.
The regulatory authority said the city purchased the securities based on the advise using its municipal bond issuances.
However, the SEC in an investigation conducted by Sally Hewitt and Kristal Olson of the Commission’s Public Finance Abuse Unit, found that Loop Capital Markets “did not maintain a system reasonably designed to supervise its municipal securities…
