Muni Dealers Fail Retail Clients With Fair Pricing, Study Says

Municipal-bond dealers are failing to provide their customers with the best execution and fair pricing, taking advantage of the prevalence of mom-and-pop buyers in the market, in violation of regulators’ rules, according to a new academic study.

Bond markups to retail customers “have remained high and variable throughout the past 15 years despite significant regulatory efforts to enhance transparency and improve execution quality,” John Griffin and Samuel Kruger of the McCombs School of Business at the University of Texas at Austin, along with Nicholas Hirschey of Portugal’s Nova School of Business & Economics, wrote in the paper, to be published ...