Citigroup and Bank of America’s Merrill Lynch are among five firms that will pay $4.48 million to settle regulatory claims they used funds from municipal and state bond deals to pay lobbyists.
Local authorities were unfairly asked to reimburse payments that the firms made over five years to the California Public Securities Association, a lobbying group, to help influence the state, the Financial Industry Regulatory Authority, which oversees securities firms, said yesterday.
The firms inadequately described the fees, wrapping them into bond-underwriting expenses, Finra said.
The script remains the same,” said Marilyn Cohen, founder of Envision Capital Management. “I’m not surprised — my surprise is they found it. That’s just the cost of doing business. It’s all pay-to-play.”
The banks, also including Goldman Sachs, JPMorgan and Morgan Stanley, agreed to pay $3.35 million in fines and reimburse certain California bond issuers $1.13 million.