The Securities and Exchange Commission announced enforcement actions Wednesday against 71 municipal issuers and other obligated persons — including the city of Memphis as well as colleges, universities and school districts— for violations in municipal bond offerings. 

The actions were brought under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents. 

From 2011 to 2014, the 71 issuers and obligated persons sold municipal bonds using offering documents that contained materially false statements or omissions about their compliance with continuing disclosure obligations, according to the SEC.

The SEC has now filed a total of 142 actions against 143 respondents as part of the MCDC Initiative. 

“The terms of the settlements reflect the credit these issuers earned for their cooperation in self-reporting pursuant to the MCDC initiative,” said LeeAnn Ghazil Gaunt, chief of the SEC Enforcement Division’s Public Finance Abuse Unit. “Because the issuers also voluntarily agreed to take steps to prevent future violations, both they and their investors have benefited from the initiative.” 

As the SEC explains, obligated persons are typically nonprofit entities such as hospitals and colleges that borrow the proceeds of bond issuances and are obligated to pay principal and interest on the bonds. 

“The diversity among the 71 entities in these actions demonstrates that continuing disclosure failures were a widespread and pervasive problem in the municipal bond market,” said Andrew Ceresney, director of the SEC Enforcement Division, in a statement. “The MCDC Initiative has brought attention to this important issue and resulted in increased compliance by municipal issuers and underwriters.”

The parties settled the actions without admitting or denying the findings and agreed to cease and desist from future violations. 

Pursuant to the terms of the initiative, they also agreed to undertake to establish appropriate policies, procedures and training regarding continuing disclosure obligations; comply with existing continuing disclosure undertakings, including updating past delinquent filings, disclose the settlement in future offering documents, and cooperate with any subsequent investigations by the SEC.