Kit Addleman and Sarah Mallett in Practical Compliance: A Year in Review for Municipal Securities: SEC Enforcement Highlights

07/24/2015

The Securities and Exchange Commission (“SEC”) touted 2014 as a record year for its enforcement program and noted cases that spanned the spectrum of the securities industry.1 Actions against municipal securities issuers and underwriters particularly stand out among the many areas of aggressive enforcement in 2014.

Since establishing the Office of Municipal Securities in 2012 as required by the Dodd-Frank Act, the SEC has intensified its scrutiny of municipal securities issuers and underwriters, particularly in the context of disclosures. In 2013, the Division of Enforcement charged more issuers with securities fraud than it had in the previous 10 years combined. In 2014, the SEC continued its aggressive stance, which resulted in a banner year of “firsts”—the first injunction to halt a municipal bond offering (City of Harvey); the first settlement under its targeted cooperation initiative (Kings Canyon); and the first “control person” case against a municipal elected official (Burtka). In calendar year 2015, however, the SEC’s enforcement program has yet to bring an action involving municipal securities.

This article reviews the 2014 municipal securities enforcement actions and analyzes what the municipal securities industry might expect in 2015 and beyond.

Excerpted from Practical Compliance and Risk Management. To read the full article, click here.

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