Securities Litigation

On September 30, the SEC issued its second round of mass settled actions over municipal securities disclosure issues, as part of its Municipal Continuing Disclosure Cooperation ("MCDC") Initiative. In this round, 22 municipal underwriters will undertake remedial measures and pay fines (ranging from $20,000 to $500,000 and totaling $4.12 million) for disclosure violations. Announced in March of 2014, the MCDC Initiative offered structured settlements for municipal underwriters and issuers who voluntarily "came in from the cold" to self-report failures of new bond issuers to adequately disclosure whether they had been keeping up with their periodic financial-reporting obligations in prior issues. The program had a five-year "look back" and was intended to rapidly bring municipal-market financial disclosures into compliance. Under the program, cooperating self-reporting municipal underwriters agreed to accept sanctions ranging from $20-60,000 per offering (capped at $100,000 to $500,000, depending on size and number of issues involved), cease and desist orders and independent-consultant review of municipal compliance programs. The SEC's order granting disqualification waivers lists this round's Respondents:'33 Act Rel. No. 9956 (September 30, 2015), here. See also Administrative Releases here. I discussed the first round of settlements here. Thomas K. Potter, III (tpotter@burr.com) is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Tom is licensed in Tennessee, Texas and Louisiana. He has over 29 years' experience representing financial institutions in litigation, regulatory and compliance matters. See attorney profile. © 2015 by Thomas K. Potter, III (all rights reserved)