UPDATE 1-Thomas Weisel may be punished on auction-rate debt
* FINRA may take disciplinary action
* Thomas Weisel says to contest any discipline
* Shares fall
NEW YORK, July 27 (Reuters) - The investment bank Thomas Weisel Partners Group Inc TWPG.O said on Monday a U.S. financial regulator has recommended disciplinary action over auction-rate securities transactions it made on behalf of customers.
According to a regulatory filing, the Financial Industry Regulatory Authority staff's recommendation against the company's Thomas Weisel Partners LLC unit concerns potential violations of rules imposed by FINRA and the Municipal Securities Rulemaking Board, as well as "certain anti-fraud and other provisions of the federal securities laws."
Thomas Weisel said it plans to vigorously contest any formal discipline that includes a censure, fine or other sanction. The San Francisco-based company said it learned of the FINRA staff recommendation on July 23.
Auction-rate debt has rates that reset in periodic auctions and was often marketed by brokers as a cash substitute.
After the $330 billion market froze in February 2008 when dealers stopped taking part in auctions, many investors could not sell the debt, or could sell it only at a loss.
More than 20 firms, including many of the largest U.S. banks, have agreed to buy back in excess of $61 billion of auction-rate debt and pay hundreds of millions of dollars of fines, through settlements with regulators.
FINRA oversees more than 4,800. The MSRB regulates the municipal bond market.
Thomas Weisel shares were down 21 cents or 4.2 percent at $4.82 in late morning trading on the Nasdaq. (Reporting by Jonathan Stempel, editing by Gerald E. McCormick)
- Obama and Castro shake hands, Zuma humiliated at Mandela memorial |
- Google bus blocked in San Francisco gentrification protest
- Reporter can keep sources secret in Colorado theater shooting: court
- Couple, four children missing in Nevada found safe in canyon
- Regulators seek to curb Wall St. trades with Volcker rule |