In a case involving California municipal bonds, five Wall Street investment banks were fined today for using proceeds of bond sales to pay their California lobbyist.
The five firms paid a total of $4.48 million in fines and restitution, according to the Financial Industry Regulatory Authority.
FINRA said the banks improperly used bond proceeds to pay fees to the California Public Securities Association, a lobbying group based in San Francisco.
Municipalities "are entitled to know what they are paying for and why. It was unfair for these underwriters to pass along the costs of their Cal PSA membership to the municipal and state bond taxpayers," said Brad Bennett, FINRA's executive vice president, in a prepared statement.
The five firms consented to the penalties without admitting or denying wrongdoing. They are: Citigroup, Goldman Sachs, JPMorgan, Merrill Lynch and Morgan Stanley.
According to FINRA, the five firms have already returned a total of $353,000 to multiple municipalities, at the request of State Treasurer Bill Lockyer.
Officials with Cal PSA weren't immediately available for comment.