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September 13, 2022 at 03:06 PM
What You Need to Know
- The four firms sold new issue municipal bonds without obtaining required disclosures for investors, the SEC said.
- SEC staff has begun investigations of other firms’ reliance on the limited offering exemption.
- These are the first actions taken by the SEC for failing to comply with municipal bond offering disclosure requirements.
The Securities and Exchange Commission said Tuesday that it has filed a litigated action against Oppenheimer & Co. Inc. and has reached settlements with BNY Mellon Capital Markets LLC, TD Securities LLC, and Jefferies LLC, for failing to comply with municipal bond offering disclosure requirements.
“These are the first SEC actions addressing underwriters who fail to meet the legal requirements that would exempt them from obtaining disclosures for investors in certain offerings of municipal bonds,” the SEC said.
According to the SEC’s complaint and the settled orders, during different periods since 2017, the four firms sold new issue municipal bonds without obtaining required disclosures for investors.
Each of the firms purported to rely on an exemption to the typical disclosure requirements called the limited-offering exemption, but they did not take the steps necessary to satisfy the exemption’s criteria, the SEC said.
The SEC’s orders find that BNY, TD and Jefferies each violated Rule 15c2-12 under the Securities Exchange Act of 1934, which establishes disclosures that must be provided to investors, as well as Municipal Securities Rulemaking Board Rule G-27 and Section 15B(c)(1) of the Exchange Act.
