econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 18 June 2015

SEC Charges 36 Firms For Fraudulent Municipal Bond Offerings

by Securities and Exchange Commission

The Securities and Exchange Commission today announced enforcement actions against 36 municipal underwriting firms for violations in municipal bond offerings. The cases are the first brought against underwriters under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents.

The Enforcement Division initiative announced in March 2014, offered favorable settlement terms to municipal bond underwriters and issuers who self-reported securities law violations. The first issuer charged under the initiative settled with the SEC in July 2014. Said SEC Chair Mary Jo White:

The MCDC initiative has already resulted in significant improvements to the municipal securities market, including heightened awareness of issuers' disclosure obligations and enhanced disclosure policies and procedures. This ongoing enforcement initiative will continue to bring lasting changes to the municipal securities markets for the benefit of investors."

In today's actions, the SEC alleged that between 2010 and 2014 the 36 firms violated federal securities laws by selling municipal bonds using offering documents that contained materially false statements or omissions about the bond issuers' compliance with continuing disclosure obligations. The underwriting firms also allegedly failed to conduct adequate due diligence to identify the misstatements and omissions before offering and selling the bonds to their customers. Said Andrew J. Ceresney, Director of the SEC's Enforcement Division:

The MCDC initiative highlights the importance of continuing disclosure in the municipal bond market and due diligence in the underwriting process. The initiative has brought much needed attention to these issues and has already improved the behavior of participants in the $3.7 trillion municipal bond market."

Continuing disclosure provides municipal bond investors with information, including annual financial reports, on an ongoing basis. The SEC's 2012 Municipal Market Report identified issuers' failure to comply with their continuing disclosure obligations as a major challenge for investors seeking information about their municipal bond holdings. Said LeeAnn Ghazil Gaunt, Chief of the Enforcement Division's Municipal Securities and Public Pensions Unit:

The settlements announced today reflect these underwriters' cooperation in self-reporting their own misconduct and agreeing to improve their procedures going forward. Because these 36 firms underwrite a substantial portion of the country's municipal bonds each year, we expect a large number of bondholders will benefit from the resulting improvements in due diligence and disclosure."

The 36 firms, which did not admit or deny the findings, agreed to cease and desist from such violations in the future. Under the terms of the MCDC initiative, they will pay civil penalties based on the number and size of the fraudulent offerings identified, up to a cap based on the size of the firm. The maximum penalty imposed is $500,000. In addition, each firm agreed to retain an independent consultant to review its policies and procedures on due diligence for municipal securities underwriting.

The MCDC initiative, which is continuing, is being coordinated by Kevin Guerrero of the Enforcement Division's Municipal Securities and Public Pensions Unit. The cases announced today were investigated by members of the unit, including Michael J. Adler, Eric A. Celauro, Joseph O. Chimienti, Kevin Currid, Susan E. Curtin, Peter J. Diskin, Keshia Ellis, Brian D. Fagel, Sally J. Hewitt, Jason A. Howard, Brian P. Knight, Robbie L. Mayer, Heidi Mitza, Cary S. Robnett, Ivonia K. Slade, Steven Varholik, Jonathan Wilcox, Monique C. Winkler, and Deputy Unit Chief Mark R. Zehner, with assistance from Ferdose al-Taie, Peter Moores, and Jeremiah Roberts.

* * *

Link to the SEC's orders and penalty amounts:

• The Baker Group, LP - $250,000

• B.C. Ziegler and Company - $250,000

• Benchmark Securities, LLC - $100,000

• Bernardi Securities, Inc. - $100,000

• BMO Capital Markets GKST Inc. - $250,000

• BNY Mellon Capital Markets, LLC - $120,000

• BOSC, Inc. - $250,000

• Central States Capital Markets, LLC - $60,000

• Citigroup Global Markets Inc. - $500,000

• City Securities Corporation - $250,000

• Davenport & Company LLC - $80,000

• Dougherty & Co. LLC - $250,000

• First National Capital Markets, Inc. - $100,000

• George K. Baum & Company - $250,000

• Goldman, Sachs & Co. - $500,000

• Hutchinson, Shockey, Erley & Co. - $220,000

• J.P. Morgan Securities LLC - $500,000

• L.J. Hart and Company - $100,000

• Loop Capital Markets, LLC - $60,000

• Martin Nelson & Co., Inc. - $100,000

• Merchant Capital, L.L.C. - $100,000

• Merrill Lynch, Pierce, Fenner & Smith Incorporated - $500,000

• Morgan Stanley & Co. LLC - $500,000

• The Northern Trust Company - $60,000

• Oppenheimer & Co. Inc. - $400,000

• Piper Jaffray & Co. - $500,000

• Raymond James & Associates, Inc. - $500,000

• RBC Capital Markets, LLC - $500,000

• Robert W. Baird & Co. Incorporated - $500,000

• Siebert Brandford Shank & Co., LLC - $240,000

• Smith Hayes Financial Services Corporation - $40,000

• Stephens Inc. - $400,000

• Sterne, Agee & Leach, Inc. - $80,000

• Stifel, Nicolaus & Company, Inc. - $500,000

• Wells Nelson & Associates, LLC - $100,000

• William Blair & Co., L.L.C. - $80,000

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Truth About Trade Agreements - and Why We Need Them
Big Mess in Italy
News Blog
It's Been A Turbulent Start, But Juno Is Now Delivering Spectacular Insights Into Jupiter
The World's Most Reputable Cities
What We Read Today 07 December 2016
October 2016 Consumer Credit Headlines Say Year-Over-Year Growth Rate Declined
Disabled Veteran And His Service Dog Get Job At Hardware Store
October 2016 JOLTS Job Openings Rate Shows Insignificant Year-over-Year Growth
Do Rises In Oil Prices Mean Rises In Food Prices?
Are Mobile Phone Payments Secure?
Infographic Of The Day: 12 Reasons To Let Your Employees Play Games
Early Headlines: Asia Stocks Up, Oil Down, House Has Stopgap $ Bill, Trump Sold All Stock, Euro Holding On, May Doubles Down, India Economy Struggles, Oz GDP Contraction And More
President Trump Must Be One-Term, Voluntarily!
Documentary Of The Week: Untold History Of The United States, 1890s To 1920
Where MPs Stood On Brexit
Investing Blog
Exuberance Returns
Investing.com Technical Summary 07 December 2016
Opinion Blog
Trump And Modi: Birds Of The Same Feather, But With Different World Views
Oil Deal Won't Last Long
Precious Metals Blog
Silver Prices Rebounded Today: Where They Are Headed
Live Markets
07Dec2016 Market Close: Wall Street Records New Highs, Health-Care Stocks Tumble, Crude Prices Stall At $50 Handle, New Fears Of A Correction Are Looming
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved