As reported by the Wall Street Journal, the SEC Enforcement Staff is one year into a wide-ranging review of disclosures made by financially stressed municipal bond issuers. This review has focused on whether municipalities made sufficient disclosures concerning the extent of their financial stress. The SEC announced that this review has already resulted in a number of investigations into municipal bond issuers.
This wide-ranging “sweep,” and the subsequent investigations, both raise several interesting issues with respect to enforcement of the securities laws against municipal issuers.
