Expanding municipal securities enforcement.
Since 2013, federal scrutiny of municipal bonds has dramatically accelerated. Fines and other sanctions are now being imposed by the SEC against a wide swathe of local governments and officials. City and county officials now have unavoidable responsibility to read and stand behind bond disclosures.
Expanding Municipal Securities Enforcement: Profound Changes for Issuers & Officials, a new book by Robert Doty (published by the International Municipal Lawyers Association), discusses three key points:
* The recent SEC enforcement aggressiveness leading to fines for issuers and officials, conditions on issuers' future issuance of bonds, bars against officials' participation in the market, and many other "firsts."
* Control person liability (broadly construed), which applies even in the absence of fraud or negligence by key officials and places a burden on the officials to prove that they acted in good faith and did not induce an issuers' fraud.
* Liability for signing official statements with misstatements or omissions without reading the documents (one official was fined and barred from the market).
The book details the rapid proliferation of SEC complaints against local governments, with specifics of each case, including recent actions where the Department of Justice has joined the enforcement process, bringing criminal charges against local officials, including a municipal attorney. Doty also explains the SEC's Municipal Continuing Disclosure Cooperation (MCDC) initiative, which allowed municipalities to reduce sanctions based on voluntary disclosure of past violations. The book includes a comprehensive hypothetical designed for self-study.
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|Title Annotation:||News & Numbers|
|Publication:||Government Finance Review|
|Date:||Oct 1, 2016|
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