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George K. Baum Overcharged School District, Regulator Says

  • Bond dealer Agrees to $100,000 Fine in enforcement case
  • Firm had justified fee because of cost to pass bond elections
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Municipal-bond underwriter George K. Baum & Co. agreed to pay a $100,000 fine over allegations it charged a school district four times the typical fee to sell debt, in part to help cover the cost of bond elections, a regulator of securities dealers said.

The firm in 2011 charged an unnamed district $416,173, or $43 per $1,000 of bonds issued, according to the Financial Industry Regulatory Authority, or Finra. The fee was “was inappropriate given the underwriting work it performed,” Finra said. Baum had told the school district a typical fee would be $7 to $9 per $1,000 of bonds.