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SEC© steps up scrutiny of municipal bonds: recently filed enforcement actions

Publisher: Mintz Levin
Author: Chip Phinney

In the past months, the SEC© has been stepping up its scrutiny of municipal bond offerings.

In the last year alone, the SEC© has filed a number of enforcement actions against bond issuers and underwriters. The alleged violations have involved misstatements or omissions concerning such topics as: compliance with tax exemption requirements or reporting requirements, limitations on debt capacity; property valuations; and municipal accounts. In particular, the announcement of the Municipalities Continuing Disclosure Cooperation Initiative, which encourages municipal bond issuers and underwriters to self-report possible disclosure violations, the SEC© specifically, noted that it may file enforcement actions against issuers for inaccurately stating in final official statements that they have substantially complied with their prior continuing disclosure obligations. Underwriters may also be charged with securities violations if they have failed to exercise adequate due diligence in determining whether issuers have complied with such obligations.  For full access to the article and more detailed enforcement action cases, please click here.

What is your opinion on the increasing enforcement actions in the municipal securities industry? Do you believe the SEC© will begin regulating the municipal bond industry at the same level of scrutiny as corporate securities?

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