Florida Broker Fined, Suspended By FINRA for Municipal Bonds Violations

Bjorn Johan Erickson (CRD#: 5756517) is a registered securities broker. Since June 2011, Mr. Erickson has been a registered representative of Newbridge Securities, LLC in St. Petersburg, Florida. Recently, the Financial Industry Regulatory Authority (FINRA) took adverse action against this broker. He was fined and suspended for violations related to municipal bonds. In this article, our Miami securities fraud attorney provides a more detailed overview of the enforcement action taken by FINRA.

Broker Sanctions: Bjorn Johan Erickson of Newbridge Securities, LLC 

FINRA took enforcement against Bjorn Johan Erickson of Newbridge Securities, LLC after alleged violations of securities industry regulations. The alleged violative conduct occurred between January of  2018 and May of 2022. Mr. Erickson reportedly breached MSRB Rule G‑27 by failing to identify and/or reasonably respond to red flags that the firm was receiving improper allocations of new-issue municipal bonds. Two other representatives of the broker-dealer were sanctioned by FINRA as well. He also reportedly failed to properly disclose his involvement in a private securities transaction in violation of FINRA rules. Without admitting or denying any of the specific allegations, Mr. Erickson was suspended for three months and fined $10,000.

 What to Know About Municipal Bonds as Investments 

Municipal bonds (munis) are a type of debt security that is issued by a state government or a local government. They are typically used to fund public projects, such as roads or schools. They are generally considered low-risk investments and often appeal to conservative investors seeking tax-advantaged income. A big benefit is that the interest earned on most municipal bonds is exempt from federal income tax (and usually state and local taxes too.) However, all investments carry risks. Investors should always carefully assess credit risk, interest rate risk, and liquidity when evaluating a municipal bond investment. It is not the right option for every investor.

 An Example of Municipal Bond Investments Gone Wrong (Puerto Rico Bonds)

 In the early 2000s, Puerto Rico issued massive amounts of so-called “triple‑tax‑exempt” bonds. They were exempt from federal, state, and local taxes and attracted investors from across the United States, including many from South Florida. The tax advantage, combined with easy credit, allowed the commonwealth to borrow heavily to cover budget shortfalls. One big problem was that it fueled chronic deficit spending Despite mounting debt (peaking around $75 billion in 2015) the territory continued issuing bonds. Sadly, many brokers underrepresented the risks that these bonds carried. Investors were not well informed. When Puerto Rico’s municipal debt was downgraded during a major financial crisis, a lot of investors were left with serious losses.

 Consult With Our Miami, FL Securities Fraud Lawyer Today

At ​Carlson & Associates, P.A., our Miami securities fraud attorney is standing by, ready to protect your rights and your interests as an investor. If you suffered significant losses in a municipal bond and you believe that fraud was an issue, we can help. Contact us today for a fully confidential, no obligation initial consultation. Our firm represents investors throughout South Florida

Source:

brokercheck.finra.org/individual/summary/5756517