Enforcement

Securities and Exchange Commission attorney Peter Chan defended the commission's Municipalities Continuing Disclosure Cooperation Initiative Wednesday, telling issuer officials not to succumb to fear or confusion about the MCDC one day after the leader of a dealer group blasted the program.

Securities Industry and Financial Markets Association president and chief executive officer Kenneth Bentsen criticized recent efforts by the Securities and Exchange Commission to further regulate the muni market, telling issuer officials on Tuesday that a new rule and initiative could undermine productive relationships between municipalities and underwriters.

State and local officials are worried that small issuers of municipal bonds will be disproportionately exposed to the risk of enforcement action under the Securities and Exchange Commission's continuing self-reporting program on disclosure failures, and plan to pressure the commission to extend the initiative's deadline beyond its current Sept. 10 date and offer more guidance.

The Financial Industry Regulatory Authority censured and fined broker-dealer Tradition Asiel Securities, Inc. $20,000 for municipal trade reporting violations in a report that fails to mention $110,000 fines for other recent similar violations under “relevant disciplinary history.”

Former CDR Financial Products, Inc. employees Douglas Goldberg and Daniel Naeh were not given any prison time or probation when sentenced on Thursday after pleading guilty in 2010 to multiple criminal charges for participating in wide-reaching bid rigging schemes in the municipal market.

Puerto Rican investors in municipal bond closed-ended funds run by UBS AG, Banco Popular and Popular Securities sued the firms.

The impact of technology on the financial markets was discussed at a Milken Global Conference panel on changes wrought by regulations passed in the wake of the financial meltdown of 2008.

Former Bank of America executive Douglas Lee Campbell received no fine or prison from federal Judge Kimba Wood for his role in rigging municipal bond contracts.

The Financial Industry Regulatory Authority has fined three firms and an individual for municipal rule violations, including for a precedent-setting case of improperly seeking reimbursement from issuers for excessive expenses on bond rating trips.

The Texas Department of Transportation is facing a federal criminal investigation of its land deals for expansion of Interstate 35E, according to reports.

Three convicted bid-riggers filed documents with a federal appeals court this week arguing that their convictions should be overturned because of several errors by the lower court.

The Securities and Exchange Commission's new program to encourage self-reporting of a specific continuing disclosure violation is facing some skepticism from bond lawyers even as one SEC attorney said it may eventually be expanded to cover other violations.

Former UBS banker Mark Zaino walked out of court a free man after a federal judge chose to impose no further sentence for his role in rigging muni bond contracts.

Dozens of dealer sales of Puerto Rico bonds to customers that violated the $100,000 minimum denomination requirement, and were then cancelled, have been erased from EMMA or altered as if they never occurred.

FINRA is examining allegations that broker-dealers violated bond documents and municipal rules by trading bonds from Puerto Rico's recent $3.5 billion general obligation deal to customers in sizes less than the required $100,000 minimum denomination.

The Louisiana State Bond Commission rejected a settlement with the Justice Department March 20 that would have resolved a federal housing discrimination suit.

The sentencing dates for convicted bid riggers Brian Zwerner, Douglas Goldberg, and Daniel Naeh have been delayed again.

It didn't take long for several broker-dealers to start selling small denominations of Puerto Rico $3.5 billion of general obligation bonds to retail investors in violation of a requirement in the official statement and municipal securities rules.

The Financial Industry Regulatory Authority fined OFS Securities, Inc. in San Juan, Puerto Rico $40,570 and ordered it to pay more than $13,278 in restitution for buying the territory's bonds for its own account and then selling them to customers at prices with excessive markups.

Federal Judge Kimba Wood, who imposed $5.6 million in fines and restitution on municipal bond bid-rigger David Rubin, called prison unwarranted for the founder of CDR Financial Products.