According to FINRA, FNBB Capital Markets, LLC was censured and fined $30,000 on July 10, 2024, for failing to include certain required mark-up and mark-down information on confirmations sent to retail customers in connection with municipal securities transactions.

The confirmations reported the firm's mark-up and mark-down as a dollar amount but failed to include the mark-up or mark-down as a percentage of the prevailing market price. This occurred because the firm did not select the appropriate fields in its clearing firm's systems when entering the transactions. The firm also failed to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to ensure compliance with MSRB Rule G-15, which governs customer confirmations for municipal securities transactions.

The firm's written supervisory procedures did not reference or discuss the MSRB's requirement that mark-ups or mark-downs be disclosed as both a total dollar amount and a percentage of the prevailing market price. This dual disclosure requirement is designed to help investors understand the true cost of their transactions and compare pricing across different brokers.

This case underscores the importance of transparency in municipal securities transactions. Investors purchasing municipal bonds should receive confirmations that clearly disclose both the dollar amount and percentage of mark-ups or mark-downs charged by the firm. This information allows investors to assess whether they are receiving fair pricing and make informed decisions about their investments. Firms must ensure their systems and procedures are designed to provide these important disclosures to customers.