It started with the SEC’s MCDC initiative and Cease and Desist Orders, then it was the resulting enhanced scrutiny of underwriters and now it’s amendments to Rule 15c2-12. Each has further emphasized the importance of ensuring a complete understanding and management of disclosure obligations and having comprehensive polices and procedures.
The amendments to Rule 15c2-12 have refocused the spotlight on issuers and their policies, procedures and controls as well as their filing history and ongoing disclosure management. Our full article (link below) highlights what the market has learned since the MCDC initiative, discusses the Rule 15c2-12 amendments and identifies several resources for your consideration.
Background: MCDC Outcomes and SEC Enforcement Actions
The MCDC initiative was “intended to address potentially widespread violations of the federal securities laws by municipal issuers and underwriters of municipal securities in connection with certain representations about continuing disclosures in bond offering documents.” This initiative resulted in Cease and Desist Orders (Orders) against 72 underwriters and 71 issuers across a wide variety of organizations. For issuers that settled, they agreed to cease and desist from future violations with the Orders requiring them to “undertake to establish appropriate policies, procedures, and training regarding continuing disclosure obligations; [and] comply with existing continuing disclosure undertakings.”
Moreover, at the Securities Enforcement Forum in 2016, then-Director of Enforcement, Andrew Ceresney stated that the “Commission is bringing actions against more municipal issuers and public officials.” Below are some key takeaways from two noteworthy cases that highlight the importance of proper disclosure management.
City of Miami Key/Boudreaux Case: