Eastern Account is a type of syndicate account that requires all members to be responsible for their own allocation as well as for their proportional share of any member’s unsold securities.
When a syndicate underwriting a new issue of municipal bonds organizes the syndicate account as an eastern account all underwriters must participate in selling any of the bonds that remain unsold. If one syndicate member does not sell their entire allocation of bonds all of the syndicate members must sell the bonds. Therefore if the syndicate member who failed to sell the bonds had a 10% allocation that syndicate member would only be required to sell 10% of what they failed to sell. The other syndicate members would be required to sell the rest.
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