SEC Files First-Ever Actions Against Muni-Bond Underwriters -- Update

By Dean Seal

The U.S. Securities and Exchange Commission filed a lawsuit against Oppenheimer & Co. Inc. and settled similar cases with three other firms for allegedly failing to comply with disclosure requirements for municipal-bond offerings.

The first-of-their-kind actions separately allege Oppenheimer, BNY Mellon Capital Markets LLC, TD Securities (USA) LLC and Jefferies LLC failed to meet the legal requirements that would exempt them from obtaining disclosures for investors in certain municipal-bond offerings.

The SEC said that at different times since 2017, the firms purported to rely on the limited offering exemption to avoid making certain disclosures, but did not take the steps necessary to obtain that exemption.

Without admitting or denying the SEC's allegations, BNY Mellon has agreed to pay a $300,000 fine and more than $650,000 in disgorgement and interest, while TD Securities and Jefferies would each pay a $100,000 fine and smaller disgorgement and interest sums.

The SEC's suit against Oppenheimer is expected to be heard in a Manhattan federal court.

A representative for Oppenheimer said Tuesday that the complaint is seeking disgorgement of profits even though it is based on sales to market professionals and no investors were harmed in the transactions at issue.

"Oppenheimer believes it acted reasonably at all times and intends to defend itself vigorously against these claims," the representative said.

Write to Dean Seal at [e-mail]

(END) Dow Jones Newswires

September 13, 2022 11:03 ET (15:03 GMT)

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