Next generation “SaaS” Securities and Exchange Commission (SEC) regulatory disclosure service iCrowdNewswire has launched an…
In early March, the SEC Division of Enforcement announced its Municipal Continuing Disclosure Cooperation Initiative. The initiative offers issuers and underwriters an opportunity to voluntarily self-report any potential material misstatements or omissions related to past compliance with continuous disclosure obligations. In exchange for self-reporting, favorable settlement terms are given in lieu of harsher punishment for violations that are not self-reported.
The SEC believes that statements regarding continuous disclosure compliance are material. Below are settlement terms if an issuer decides to self-report:
- Consent to a cease and desist proceeding under Section 8A of the Securities Act for violations of Section 17(a)(2) of the Securities Act (the issuer will neither admit nor deny wrongdoing);
- Undertake to:
- Establish appropriate policies and procedures and training regarding continuing disclosure obligations within 180 days;
- Comply with existing continuing disclosure undertakings within 180 days;
- Cooperate with any subsequent investigation by the SEC regarding the false statement(s), including roles of individuals and/or other parties involved (notably the settlement only applies to the issuer, and the SEC may still bring actions against individuals);
- Disclose settlement terms in any offering statement for the next five years; and
- Certify compliance with the settlement undertakings one year from the date of settlement
Because the initiative is a new program, it is unclear how broad the SEC’s enforcement actions will be against issuers, obligors, or underwriters that choose not to self-report.
For full access to the article, please click here.