SEC Charges Broker-Dealer A.G.P./Alliance Global Partners, LLC for Quoting and Trading Municipal Securities At Above-Market and Unfair and Unreasonable Prices

ADMINISTRATIVE PROCEEDING
File No. 3-22255

October 16, 2024 - The Securities and Exchange Commission today charged that A.G.P./Alliance Global Partners, LLC ("Alliance") engaged in unfair practices in connection with its municipal securities business by quoting municipal bonds at above-market prices and by facilitating the sale of the bonds at above-market prices that were also unfair and unreasonable on behalf of a customer. Alliance agreed to settle the charges without admitting or denying the SEC's findings.

According to the SEC's order, between February 2019 and February 2021, Alliance published quotes on a daily basis for between 4,300 and 6,500 different municipal bonds at above-market prices for a customer that was a Sophisticated Municipal Market Professional without independently evaluating the fair market values of the bonds at the time it made the quotations. Alliance also facilitated sales attributable to the quotes in a principal capacity on 204 occasions without evaluating the prevailing market prices of the bonds. As a result, on 193 occasions, Alliance purchased the bonds from its customer at above-market prices and sold the bonds at higher prices to dealers that, in turn, sold the bonds to investors, or to other dealers that sold the bonds to investors, at even higher prices. In at least 51 instances, Alliance paid its customer above-market prices that were unfair and unreasonable and failed to identify these trades as "away from the market" when it reported them to the Municipal Securities Rulemaking Board's ("MSRB") Real-Time Transaction Reporting System for display on the MSRB's Electronic Municipal Market Access platform. Alliance's pricing failures created a risk that other participants in the market relied on the inflated prices to price or value the same or similar bonds.

Alliance consented to the SEC's cease-and-desist order censuring the firm and finding that it violated MSRB Rules G-13, G-14, G-17, G-27 and G-30 and Section 15B(c)(1) of the Securities Exchange Act of 1934. Alliance also agreed to pay disgorgement of $11,369.00, prejudgment interest of $2,407.38, and a civil penalty of $100,000.00.

The SEC's investigation was conducted by Sue Curtin and Jon Wilcox of the Enforcement Division's Public Finance Abuse Unit ("PFA"), Michael Moran of the Boston Regional Office, Michael Fioribello of the Division of Examinations, Samir Badalov of the Enforcement Division's Office of Market Intelligence, and Howard Kaplan of the Enforcement Division's Office of Investigative and Market Analytics. The investigation was supervised by Kevin B. Currid of the PFA. The SEC appreciates the assistance provided in this investigation by the staff of the MSRB.