NASD Eying Tobacco Debt Trade Prices

Hume, Lynn
April 2003
Bond Buyer;4/7/2003, Vol. 344 Issue 31609, p1
Trade Publication
U.S. National Association of Securities Dealers (NASD) is closely examining tobacco bond trade prices in the wake of complaints by some market participants that dealers may be trying to take advantage of investors in the turmoil resulting from a 12 billion dollar bond cigarette company Philip Morris USA Inc. is required to post in order to appeal an adverse verdict in an Illinois smoking case. NASD routinely surveys the data for pricing abuses and has brought enforcement cases against a few dealers during 2001-2 alleging they charged customers excessive markups and markdowns on municipal bond purchases and sales. None of these cases has involved tobacco bonds. But market participants have pointed to the spreads in tobacco bond prices that have occurred in the aftermath of the court decision against Philip Morris, which has spawned numerous credit rating downgrades.


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