SEC Examines Bond Dealers’ Commissions

The Securities and Exchange Commission is examining whether municipal and corporate bond dealers are charging inappropriate commissions when selling bonds to investors, enforcement director Stephen Cutler said Tuesday.

“We are getting more proactive in examination and enforcement of dealer markups,” or commissions, Cutler said after a panel discussion at a Bond Market Assn. conference in New York. He declined to elaborate on the probe or disclose which dealers might be under scrutiny.

Unlike stocks, which trade on exchanges or other centralized marketplaces where prices can be consolidated and disseminated, most bonds are bought and sold by broker-dealers who don’t centrally publish last-sale prices or offers to buy or sell.