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Mandatory Continuing Disclosure Cooperation Settlement offers to come from SEC

The Securities and Exchange Commission (SEC) will be reaching out to municipalities in the coming months with settlement offers for continuing disclosure violations, according to the Government Finance Officers Association (GFOA).

In February, the SEC completed $18 million in settlements with underwriters who provided false documentation for continuing disclosure requirements to municipalities. Many municipal bonds issued in prior years have not met the mandatory disclosure requirements and in some cases underwriters provided false documentation of disclosure. The SEC is not expected to impose fines on bond issuers (municipalities), although additional enforcement action may be taken against government officials guilty of misstatement or omission.

Terms of the settlement offers are expected to include the establishment of policies and procedures, as well as training on continuing disclosure and compliance with current requirements (including delinquent filings) within 180 days. The timelines for the settlement offers is expected to be tight and issuers should prepare to respond quickly. If additional time is needed, it should be requested, but municipalities are encouraged to inform governing boards and elected officials quickly. The GFOA recommends that municipalities discuss the settlement terms with legal counsel before responding to the SEC.

To learn more about the settlement process click here.

Urban Futures, Inc. has been providing services to local governmental agencies for over 43 years. Operating as five divisions – UFI Public Management Group, UFI Public Finance Group, UFI Sustainable Communities Development Group, UFI Analytics & Compliance Group, and Isom Advisors – UFI offers clients a growing portfolio of services and industry expertise that might otherwise be out of reach. Over 300 public agencies have benefited from partnering with UFI. UFI is based in Orange, CA with a Northern California office in Walnut Creek. Visit their website at or call (714) 283-9334.

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