SEC alleges that Wolfe & Hurst manipulated muni bids-wanted auctions

By Jennifer Chiou

New York, May 13 - The Securities and Exchange Commission said that one of Wolfe & Hurst Bond Brokers, Inc.'s former registered representatives allegedly manipulated bids-wanted auctions for municipal securities.

On March 13, the SEC issued an order instituting administrative and cease-and-desist proceedings against the company and Peter J. Debany.

According to the commission, the order finds that from January 2002 through December 2003, Wolfe & Hurst, through Debany, knowingly engaged in materially manipulative conduct while conducting certain bids-wanted auctions for municipal bonds. This had the effect of reducing the spread between winning bids and the second-highest or cover bids and, in some cases, may have affected the prices paid for the municipal bonds.

The SEC added that Wolfe & Hurst and Debany artificially narrowed the spreads of certain auctions by: 1) lowering the bids of the highest bidders; and 2) entering new bids in amounts between the winning bid and the existing cover bid during the auctions and advising the high bidder and the seller that those new cover bids were received from other municipal securities broker-dealers.

In addition, the order bars Debany from association with any broker, dealer or municipal securities dealer with the right to reapply for association after one year, and requires Wolfe & Hurst and Debany to each pay a civil money penalty of $25,000.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.