SEC Smacks 71 Municipal Issuers for Muni Bond Violations

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.