Enforcement

The Securities and Exchange Commission has charged Allen Park, Mich., and two former city leaders with fraud in connection with a municipal bond offering to support a movie studio project within the city.

The Securities and Exchange Commission's enforcement action against 13 dealer firms Monday represents a broad commission effort to correct behavior that was probably due to mistakes by individual traders dealing with an unusual bond issuance, attorneys and market participants said Tuesday.

Former Miami, Fla. budget director Michael Boudreaux is seeking a rehearing before a full federal court of appeals after a three-judge panel earlier this year denied his claim of immunity from a Securities and Exchange Commission lawsuit.

The Securities and Exchange Commission today sanctioned 13 firms for improperly selling Puerto Rico bonds in denominations below a $100,000 minimum denomination set in a $3.5 billion offering earlier this year.

Claims against UBS from Puerto Rican investors have surged to $900 million, the group said Tuesday in its third-quarter earnings report.

Convicted bid-riggers Peter Ghavami, Michael Welty, and Gary Heinz are urging a federal appeals court to overturn a lower court's decision on the basis of an expired statute of limitations, improper testimony, and other alleged errors in their earlier trial, but the federal government is arguing the lower court was correct to punish the former UBS AG executives.

The Government of the U.S. Virgin Islands and the Virgin Islands Public Finance Authority filed a lawsuit this week against their former bond counsel and financial advisor, alleging they were negligent when they advised that $219.49 million of bonds issued in 2006 would be tax exempt.

The Municipal Securities Rulemaking Board is proposing to establish limits on the gifts and non-cash benefits municipal advisors can provide in their professional capacities.

The Bond Dealers of America is urging the Securities and Exchange Commission to crack down on non-dealer municipal advisors acting as unlicensed broker-dealers by assisting municipalities in placing their debt through the direct placement markets.

The Securities and Exchange Commission said that new technology and investigative techniques led to a strong fiscal 2014 enforcement year, including municipal bond cases.

Public officials who have traditionally believed that they are safe from Securities and Exchange Commission action if they avoid exchanges of favor should think again in the face of increased SEC focus on anti-corruption efforts, former commission enforcement lawyer Peter Chan said.

The Financial Industry Regulatory Authority fined two firms a total of $28,500 for violations of municipal securities rules, including excessive markups and trade reporting failures.

Texas Attorney General Greg Abbott reached a settlement with Houston-area financial advisor R. Craig Rathmann, accused of colluding with RBC Capital Markets to limit competition on bond deals for municipal utility districts.

Inspections of municipal advisors will be low-stress and MAs will be notified in advance before seeing any Securities and Exchange Commission personnel at their doors, members of the SEC's Office of Compliance Inspections and Examinations told non-dealer advisors.

UBS has agreed to compensate 34 Puerto Rico-based investors for their losses in investments in their municipal bond closed ended funds.

Municipal issuers need to understand the thinking inside the Securities and Exchange Commission’s enforcement division, take steps to protect themselves, and think about whether fundamental changes to muni market regulation might be in their best interests, said former SEC lawyer Peter Chan.

Broker-dealers who voluntarily reported disclosure missteps under the Securities and Exchange Commission's Municipalities Continuing Disclosure Cooperation initiative shouldn't just sit around waiting for the SEC to make contact.

Texas Attorney General Greg Abbott announced settlement of an investigation of anticompetitive activities involving underwriting fees paid by municipal utility districts in the Houston area.

Peter Chan, the architect of the Securities and Exchange Commission's Municipalities Continuing Disclosure Cooperation initiative, will join Morgan, Lewis & Bockius as a partner in the firm's Chicago office, it announced Thursday.

Three municipal securities regulators plan to hold the first Compliance Outreach Program for Municipal Advisors in Chicago on Nov. 3 and are asking folks to register for it.