ADMINISTRATIVE PROCEEDING
File No. 3-21531

July 18, 2023 – The Securities and Exchange Commission today announced that Fifth Third Securities, Inc. has agreed to settle charges that it failed to comply with municipal bond offering disclosure requirements under Rule 15c2-12 of the Securities Exchange Act of 1934. 

According to the order, from March 2018 to September 2022, Fifth Third sold new issue municipal bonds without obtaining required disclosures for investors in 79 municipal bond offerings.  Fifth Third purported to rely on an exemption to the typical disclosure requirements called the limited offering exemption, but it did not take the steps necessary to satisfy the exemption’s criteria.  The order also found that Fifth Third did not have any specific policies or procedures reasonably designed to comply with the limited offering exemption.

The order finds that Fifth Third willfully violated Section 15B(c)(1) of the Exchange Act, Rule 15c2-12 under the Exchange Act, as well as Rule G-27 of the Municipal Securities Rulemaking Board.  Without admitting or denying the SEC’s findings, Fifth Third agreed to settle the charges, cease-and-desist from future violations of those provisions, be censured, and pay $442,465.59 in disgorgement plus prejudgment interest of $67,506.09 and a $200,000 civil money penalty.

Since September 2022, the Commission has taken action against seven firms for non-compliance with the limited offering exemption.  Firms that believe their practices do not comply with the securities laws are encouraged to contact the SEC at LimitedOfferingExemption@sec.gov.

The SEC’s investigation was conducted by Warren Greth, Cori Shepherd Whitten, and Laura Cunningham, and supervised by Ivonia Slade and Rebecca Olsen.