BondsRUs is a broker-dealer that (unsurprisingly) specializes in bonds. The firm has found that it is able to sell Treasury bonds that it buys for $90 per $100 of par value for $99 per $100 of par value to some of its more naïve clients, who never pay attention to the confirmation statements BondsRUs sends them. BondsRUs is guilty of

BondsRUs is guilty of overcharging its clients by unreasonable markups. A $9 dealer’s spread on a risk-free investment such as a Treasury bond is unwarranted, and this practice is prohibited. Based on the information provided, BondsRUs is not guilty of fraud since it appears that the firm is revealing the markup in its confirmation statements. The clients just aren’t paying attention.