SEC says Oppenheimer, BNY Mellon Capital Markets, TD Securities (USA) and Jefferies LLC Failed to Comply with Municipal bond Offering Disclosure Requirements. 

According to a press release on September 13, 2022, the Securities and Exchange Commission filed a litigated action against Oppenheimer & Co. Inc. and separately announced settlements with BNY Mellon Capital Markets LLC, TD Securities (USA) LLC, and Jefferies LLC, charging each of the four firms with failing to comply with municipal bond offering disclosure requirements.  

This is reportedly the first time the SEC is addressing underwriters who fail to meet the legal requirements that would exempt them from obtaining disclosures for investors in certain offerings of municipal bonds. 

During different periods since 2017, the four firms reportedly sold new issue municipal bonds without obtaining required disclosures for investors, according to the release. Each of the firms purported to rely on an exemption to the typical disclosure requirements called the limited offering exemption, but they allegedly did not take the steps necessary to satisfy the exemption’s criteria. 

The following three firms agreed to settle the charges, cease and desist from future violations of those provisions, be censured, and pay the following monetary relief: BNY will pay $656,833.56 in disgorgement plus prejudgment interest and a $300,000 penalty; TD will pay $52,955.92 in disgorgement plus prejudgment interest and a $100,000 penalty; and Jefferies will pay $43,215.22 in disgorgement plus prejudgment interest and a $100,000 penalty. 

 The SEC’s complaint against Oppenheimer, filed in federal district court in Manhattan, reportedly charges the same violations as above in connection with at least 354 offerings. The complaint also alleges that Oppenheimer made deceptive statements to issuers in violation of MSRB Rule G-17, which prohibits deceptive, dishonest, or unfair practices. The complaint seeks permanent injunctions, disgorgement plus prejudgment interest, and a civil money penalty.  

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