The unwillingness of our government to charge and try the elite white collar robbers of theft from the working man during the 2007-08 has only propitiated a continued increase in pilfering over the past seven years. I have been writing about these Wall Street as well as Main Street financial firms on my website recently. When an investor places ones full faith and trust in one financial investment adviser or one firm you are placing your future in hands that often steal your investments without your wherewithal. One might be better off simply purchasing metals at 1% or less commission and storing them yourselves instead of paying 3-8% and possibly much more?
The SEC, Securities and Exchange Commission announced new fines against another 22 municipal underwriting firms for violations in municipal bond offerings. The first enforcement actions against underwriters under the initiative were instituted in June 2015 against 36 municipal underwriting firms. The SEC found that between 2010- 2014 these firms violated federal securities laws by selling municipal bonds using documents that contained OMISSIONS about the bond issuers’ compliance of continuing disclosure obligations and materially FALSE statements. These firms failed to conduct adequate due diligence to identify the misstatements and omissions before offering and selling the bonds to their customers.
The 22 firms, which did not admit or deny the findings, agreed to cease and desist from such violations in the future. Under the terms of the MCDC, Municipalities Continuing Disclosure Cooperative Initiative, they will pay civil penalties based on the number and size of the fraudulent offerings identified, up to a cap based on the size of the firm. The maximum penalty imposed is $500,000. In addition, each firm agreed to retain an independent consultant to review its policies and procedures on due diligence for municipal securities underwriting.
“The MCDC Initiative has revealed that in recent years, a large number of municipal bond underwriters failed to conduct adequate due diligence before selling municipal bonds to their customers,” said Andrew Ceresney, Director of the SEC’s Enforcement Division, “In addition to effectively addressing this past misconduct, we believe the initiative has been effective in improving underwriter due diligence in municipal securities offerings on a going forward basis.”
The SEC’s 2012 Municipal Market Report cited that Municipal Bond firms continued to fail to comply with their continuing disclosure obligations which represent a major challenge for investors seeking information about their municipal bond holdings.