The month of March has brought with it the first-ever criminal municipal bond securities fraud conviction, the resolution of enforcement actions targeting banks and senior executives accused of shirking duties to oversee municipal bond issuances, and proposed rule amendments intended to improve municipal securities disclosures—continuing a trend of intensified regulatory enforcement that targets industry “gatekeepers” such as auditors, bond underwriters, and others that serve investor clients entering the municipal bond market.   
Continue Reading March Madness in the Municipal Bond Market – A Focus on Gatekeepers

Recent SEC actions confirm that the SEC is making good on its promise to focus attention on the municipal bond market and the disclosure obligations of municipalities. According to the SEC, investors hold approximately $3.7 trillion dollars in municipal debt today, in contrast to just $20 billion in 1945. In light of the increase in municipal bond debt, the SEC conducted a comprehensive review of the municipal securities market in 2012. That same year, the SEC issued recommendations, including potential legislative changes and suggested rulemaking, to improve the municipal securities market and to enhance disclosures available to investors. More recently, in March the SEC Enforcement Division launched the Municipalities Continuing Disclosure Cooperation (“MCDC”) initiative. The MCDC initiative provides standardized settlement terms for issuers and underwriters in the municipal bond market who self-report violations of disclosure obligations. Importantly, the MCDC initiative permits issuers who were already under investigation the opportunity to accept the MCDC standard terms. The MCDC initiative expires on September 10. A recent California school district case, involving the Kings Canyon Joint Unified School District (“Kings Canyon”) was the first case to be resolved under the MCDC initiative.
Continue Reading The SEC’s Increasing Focus on the Municipal Bond Market