[ by Howard Haykin ] St. Louis-based Edward D. Jones & Co., L.P. agreed to settle FINRA charges that the firm, among other things, executed municipal securities purchases and sales with customers on a proprietary basis at aggregate prices - including any markup or markdown - that were not fair and reasonable.  The firm has been a FINRA member since October 1939. Under this AWC, FINRA further charged Edward Jones with having failed to provide customers with best execution on corporate fixed income transactions, and having submitted inaccurate short interest position reports for or with a customer, it failed to provide best execution - i.e., best inter-dealer market - so that the resultant price to its customer was not as favorable as possible under prevailing market conditions. FINRA Findings and Allegations. Market Reg's Fixed Income Section reviewed the firm's compliance with best execution obligations in connection with the purchase or sale of municipal securities during the 3-month period, from 1/1/08 through 3/31/08.  Examiners found that, in 5 transactions, the firm purchased municipal securities for its own account from a customer and/or sold municipal securities for its own account to a customer at an aggregate price (including any mark-down or mark-up) that was not fair and reasonable, ...

"taking into consideration all relevant factors, including the best judgment of the broker, dealer or municipal securities dealer as to the fair market value of the securities at the time of the transaction and of any securities exchanged or traded in connection with the transaction, the expense involved in effecting the transaction, the fact that the broker, dealer, or municipal securities dealer is entitled to a profit, and the total dollar amount of the transaction."

Cited Violations and FINRA Sanctions. Such conduct as decribed above, would constitute separate and distinct violations of MSRB Rules G-17 and G-30(a).  For allegedly having priced unfairly proprietary muni securities transactions with customers, and for its alleged violations with regard to corporate fixed income transactions and submitted short interest position reports, Edward Jones agreed to pay a $55K fine and pay over $13,000 plus interest, in restitution to customers. Case reported in [FINRA Disciplinary Actions for June 2012]. For further details, go to:  [FINRA AWC #2006005438901].