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Sept. 10 Deadline Approaching for Cities to Report Violations of Certain Municipal Securities Laws

State Treasurers Website Features Important Resources

July 11, 2014
Cities that have issued debt in the last five years may be interested in two recent webinars hosted by the State Treasurer’s California Debt and Investment Advisory Commission (CDIAC).
 
These webinars provide cities with important information on the Securities and Exchange Commission (SEC) Municipalities Continuing Disclosure Cooperation Initiative (the MCDC Initiative).

On March 10, SEC announced a new cooperative enforcement initiative designed to encourage any issuers and underwriters of municipal securities to self-report certain violations of the federal securities laws. Issuers and underwriters have Sept. 10 under the MCDC Initiative to self-report materially inaccurate statements in a final official statement regarding the issuer’s prior compliance with its continuing obligations as described in Rule 15c2-12. SEC offers no assurances to issuers and underwriters who do not take advantage of the MCDC Initiative.
 
An April 28 webinar provided information on the MCDC Initiative, including:
  • The origins of the MCDC Initiative and why it is advantageous for issuers and underwriters to participate.
  • Issuers and underwriters who should consider self-reporting under the MCDC Initiative.
  • The process of self-reporting under the MCDC Initiative.
To take advantage of the MCDC Initiative, issuers should undertake a rigorous analysis of their exposure as well as fully consider the consequences of self-reporting or not reporting.  
 
The follow up webinar on June 2 considered some of the key steps that issuers should initiate now and the decision points that issuers should recognize in their deliberations including:
  • What steps should issuers take to determine their status?
  • How should issuers address the standard of “materiality” contained within the MCDC Initiative?
  • Who needs to be involved in the decision process?
  • What are the implications of participating in the MCDC Initiative? What are the implications of not participating? What is the consequence of a consent decree between the issuer and SEC?
  • What is the timeline for compliance?
Video and transcripts of both webinars are available on the Treasurer’s website


 
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