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Public Finance Matters Updates on recent public finance and municipal bond developments

Category Archives: Disclosure

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SEC Proposes Expansive New Continuing Disclosure Requirements Regarding Private Debt and Other Financial Obligations

Posted in Disclosure

By CHARLES E. CAREY On March 15, 2017, the Securities and Exchange Commission (“Commission” or “SEC”) published in the Federal Register for comment proposed amendments to Rule 15c2-12 (the “Rule”) under the Securities Exchange Act of 1934 (“Exchange Act”) that would amend the list of event notices required under the Rule in a manner that,… Continue Reading

Current and Former SEC Officials Speak About Enforcement Issues Concerning Municipal Securities

Posted in Disclosure

By JOHN REGIER and BRETON LEONE-QUICK Last week, the National Association of Bond Lawyers held its 13th Annual Tax and Securities Law Institute.  Some of the panels included current and former employees of the SEC who spoke on several of the more notable recent developments with respect to enforcement actions in the Municipal Securities space:… Continue Reading

SEC Introduces “Control Person” Liability as Enforcement Action Weapon in Claim Against Municipal Officer for Misleading Bond Offering Document

Posted in Disclosure

By Len Weiser-Varon The U.S. Securities and Exchange Commission recently settled the first securities fraud charges brought against a municipal official alleging “control person” status under the federal securities laws.  The SEC’s settlement with the former mayor of the city of Allen Park, Michigan bars him from participating in future securities offerings and imposes a… Continue Reading

Negligent Disclosure and Imputed Scienter: Recent SEC Enforcement Actions Against Municipal Bond Issuers

Posted in Disclosure

  The post on our securities litigation and compliance blog titled “SEC Steps Up Scrutiny of Municipal Bonds: Recently Filed Enforcement Actions”  surveys recent SEC enforcement actions against municipal bond issuers.  As discussed in the post, the SEC’s charges in these actions include charges based on issuer negligence (versus the “scienter” standard of knowingly or recklessly… Continue Reading

Mintz Levin to Conduct Webinar on SEC Enforcement and Self-Reporting Initiatives Relating to Municipal Bond Issuers and Underwriters

Posted in Disclosure

As indicated in the adjacent blog posts, the SEC is increasing its enforcement presence in the municipal bond market, including enforcement and self-reporting initiatives relating to disclosures about an issuer’s historic compliance with Rule 15c2-12 continuing disclosure agreement obligations.  Mintz Levin is hosting a webinar to review these developments and the conundrums the self-reporting initiative… Continue Reading

SEC Enforcement Staff Continues Sweep of Financially Distressed Municipal Bond Issuers

Posted in Disclosure

For an analysis of the SEC Enforcement Staff’s recent announcement that it is one year into a general sweep of financially distressed municipal bond issuers and that it has commenced formal investigations against some of these issuers, please view the post on our securities litigation and compliance blog titled, “SEC Enforcement Staff’s Investigations of Financially… Continue Reading

MSRB Proposes Rule G-47 on Time of Trade Disclosure Obligations

Posted in Disclosure, Regulatory Proposals

By LEN WEISER-VARON MSRB Rule G-17 has been interpreted by the MSRB as requiring a broker or dealer (“broker”) to  disclose to its customer, at or prior to the time of trade of a municipal security, all material information about the transaction known by the broker, as well as material information about the security that… Continue Reading

Conflicts Disclosure and Acknowledgments in MSRB Rule G-17 Disclosure Letters

Posted in Disclosure

By CHARLES E. CAREY Since August 2, 2012, investment banking firms retained to act as underwriters on municipal finance transactions have been required to provide written disclosure to issuers concerning the relationship between issuers and underwriters, possible conflicts of interest and certain other matters under Municipal Securities Rulemaking Board (MSRB) Rule G-17 (Rule G-17) and… Continue Reading

SEC Issues Investor Bulletin Regarding Municipal Bonds

Posted in Disclosure

BY CHARLES CAREY On March 19, the SEC’s Office of Investor Education and Advocacy issued an Investor Bulletin http://www.sec.gov/investor/alerts/municipalbonds.htm to help educate individual investors about municipal bonds. While the Investor Bulletin is fairly basic and addressed primarily to investors generally, the list of some of the risks of investing in municipal bonds included in the… Continue Reading

SEC Focuses On Municipal Underwriter Compliance With Due Diligence Obligations

Posted in Disclosure

BY LEN WEISER-VARON On March 19, the SEC’s Office of Compliance Inspections and Examinations released a National Examination Risk Alert http://www.sec.gov/about/offices/ocie/riskalert-muniduediligence.pdf reporting on its examinations of broker-dealers for compliance with municipal bond underwriter due diligence obligations under the SEC’s prior interpretive releases and under SEC Rule 15c2-12. The release of the Risk Alert dovetails with… Continue Reading

Supreme Court “Makes” Securities Fraud Recovery More Difficult

Posted in Disclosure

By LEN WEISER-VARON Legislatures legislate, and courts decide what they meant.  The principal federal law recourse for investors in municipal bonds and other unregistered securities for investment losses caused by fraudulent disclosure arises from a judicial reading of SEC Rule 10b-5 as creating an “implied” private cause of action.  (The appellate courts in most of… Continue Reading

Disclosure of Municipal Bond Ratings Required

Posted in Disclosure

BY LEN WEISER-VARON FINRA has fined three broker-dealers that failed to disclose underlying ratings on insured bonds to customers.  FINRA considered this a violation of the broker-dealers’ fair dealing obligations under MSRB Rule G-17, which requires the broker to disclose to a muni bond purchaser all material information that is publicly available.  If ratings are material… Continue Reading