Securities and Exchange Commission (SEC)

The SEC’s Division of Enforcement was created in 1972 to consolidate all of the SEC’s enforcement functions, which previously were handled between various divisions within the SEC.  Accordingly, the Division of Enforcement is responsible for the investigation of potential federal securities laws violations, administrative proceedings involving these alleged violations, as well as any civil suits filed in federal courts due to the violations.

Representative SEC Enforcement Actions

Key areas examined by the SEC in recent enforcement actions under Rule 10b-5 and Section 17(a) include: (i) the responsibility to present accurate statements about compliance with continuing disclosure obligations; (ii) the responsibility of Issuers to present accurate and complete information in financial statements; (iii) the responsibility of Issuer officials that authorize Offering Documents to ensure that such documents are accurate and complete; (iv) the degree and manner in which Issuers may rely on staff, third-party experts and attorneys in the drafting and review of Offering Documents; (v) the responsibilities of Underwriters to ensure the accuracy of Official Statements; and (vi) the levying of financial penalties against Issuers, Borrowers, Underwriters, Municipal Advisors and other professionals. These areas do not constitute the entire universe of enforcement actions in the municipal Securities market. For a complete listing of enforcement actions, including the text of certain SEC orders, visit the webpage of OMS.

The SEC’s involvement in the municipal Securities market is handled by OMS. OMS coordinates the SEC’s municipal Securities activities and administers the SEC’s rules pertaining to municipal Securities brokers and dealers, Municipal Advisors, investors in municipal Securities and municipal Issuers. OMS advises the SEC on policy matters relating to the municipal Securities market and is responsible for policy development, coordination and implementation of SEC initiatives to improve the municipal Securities market. In addition, OMS provides technical assistance to the Division of Enforcement and the Office of Compliance Inspections and Examinations. OMS works with outside agencies as well because it is the SEC’s liaison with the MSRB, FINRA, the Internal Revenue Service’s Office of Tax-Exempt Bonds and other investor and industry groups and regulators with interests in municipal Securities. Additionally, OMS actively works within the municipal Securities market to educate officials of Issuers and Borrowers on applicable SEC rules.