PHILADELPHIA — The Securities and Exchange Commission is preparing procedures that it will use to conduct examinations of independent, non-dealer municipal advisors to see if they are complying with federal laws and rules pertaining to municipal securities, an SEC official said Thursday.
The municipal securities and public pensions unit in the SEC's enforcement division is helping the commission's Office of Compliance, Inspections and Examinations prepare the examination process, Elaine Greenberg, the unit's chief, told dealers.
Her remarks came at a municipal fixed-income and legal compliance roundtable here co-sponsored by the Bond Dealers of America and Morgan, Lewis & Bockius LLP.
The OCIE recently established a fixed-income working group, Greenberg said in an interview, as part of an ongoing, nationwide restructuring of that office.
Greenberg declined to provide specifics about topics that would be covered in the independent muni advisor examination process, or about the size of the OCIE's fixed-income working group, saying it is still too soon to know.
Dealer FAs may be examined by the Financial Industry Regulatory Authority, which regulates broker-dealers, but that issue has not been decided, she said.
In response to a question from an audience member about muni-related whistleblower complaints, Greenberg said the SEC's whistleblower office, created by the Dodd-Frank Act, collects the forms, which are filed online.
In an interview, she declined to say whether the office has referred muni-related complaints to her unit, which was formed about 18 months ago.
Any such referrals would be non-public, she said.
But an annual report of the whistleblower program for fiscal year 2011, said that the office fielded a total of nine tips or complaints about municipal securities and public pensions between Aug. 12, when rules for submitting tips were finalized, and Sept. 30, when the fiscal year ended.
Of that number, which accounts for 2.7% of all whistleblower tips, the office received six muni and pension-related complaints in August and another three in September.
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Separately, in response to a question from another audience member about whether the SEC had brought any cases stemming from fraudulent valuation or pricing of munis, Greenberg referred to a series of enforcement matters brought by the agency against broker's brokers between 2007 and 2009.
But she stopped short of saying whether the SEC currently has any ongoing probes of broker's brokers, which match dealer sellers with dealer purchasers.
"It's still an area of concern," Greenberg said in an interview.
