Law and regulation

Securities and Exchange Commission municipal securities chief John Cross on Friday tried to allay the fears of bond lawyers, who continue to have many technical questions about the SEC's new municipal advisor rule.

FirstSouthwest vice chairman Michael Bartolotta has taken over the chairmanship of the Securities Industry and Financial Markets Association’s municipal securities division.

For yet another year, uncertainty surrounding the potential loss or cap of the municipal tax exemption concerned panelists at the National Municipal Bond Summit.

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.

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.

Non-dealer financial advisors are warning the Municipal Securities Rulemaking Board's proposed new best execution rule may conflict with the MSRB’s existing fair-dealing rule. Both they and dealers are seeking clarifications on what the rule would require dealers to do.

The Government Finance Officers Association has adopted revised best practices to adjust for municipal advisor regulation that takes effect July 1.

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

Attorneys opposed to new municipal advisor regulation warned state treasurers this week that the new regime will end productive relationships with investment bankers and hurt issuers financially.

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.

Regulatory officials are urging state treasurers to take the lead on helping municipalities understand disclosure compliance, as well as remaining engaged on developing municipal advisor rulemaking and guidance.

The Securities and Exchange Commission and the Financial Industry Regulatory Authority announced on Tuesday that they plan to jointly hold a series of free regional compliance outreach programs for broker-dealers in April and June.

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.

The Municipal Securities Rulemaking Board on Monday proposed to amend its rule on professional qualifications to cover municipal advisors and require them to take a test as soon as next year.

The Financial Industry Regulatory has a growing list of arbitration claims related to Puerto Rico bonds on its plate as investors seek damages for what they claim was misleading advice about bond funds.

Dealer groups are happy that the Municipal Securities Rulemaking Board has exempted sophisticated municipal market professionals from its proposed best execution rule, but would like more guidance and economic analysis going forward.

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.

A federal judge sentenced CDR Financial Products Inc. founder David Rubin to two years' probation and ordered him to pay a combined $5.65 million in fines and restitution for his role in rigging bids for municipal bond contracts.

The Municipal Securities Rulemaking Board has received approval from the Securities and Exchange Commission to consolidate interpretive guidance on dealers' time-of-trade disclosure obligations into three new rules and amendments to an existing rule.