SEC Seeks Further Enforcement of Municipal Securities Issuers through Self Reporting

Thursday, April 24, 2014

On March 10, 2014, the SEC announced a new program aimed at compelling government bond issuers to self-report violations of federal securities laws. While the SEC is prohibited from regulating government issuers under federal law, the commission can file enforcement actions against municipal issuers for misrepresentations about the prior compliance of bond offerings with continuing disclosure obligations. According to the commission’s press release, the Municipalities Continuing Disclosure Cooperation initiative will offer “standardized, favorable settlement terms to municipal issuers and underwriters who self-report that they have made inaccurate statements in bond offerings about their prior compliance with continuing disclosure obligations.” On the other hand, the press statement mentions that those that do not self-report can “expect to face increased sanctions for violations.” The initiative is effective through September 10, 2014. Additional details for issuers that would like to participate in the program are available here.