Number
141092
Version
Original
Sponsor
THE CHAIR
Title
Resolution authorizing the City to self-report under the Securities and Exchange Commission’s Municipal Continuing Disclosure Cooperation Initiative.
Analysis
This resolution authorizes the filing of a self-report pursuant to the Securities and Exchange Commission’s (SEC) Municipalities Continuing Disclosure Cooperation (MCDC) Initiative.
In the ’SECs August 2012 Municipal Market Report
, the SEC is significantly concerned that many municipal issuers have not been complying with their obligation to file continuing disclosure documents and that federal securities law violations involving false statements concerning such compliance may be widespread.
While the Comptroller does not believe the City has any material disclosure violations, the SEC has not issued any guidance on what is “material”. The SEC could assert that the City’s minor compliance foot faults constitute violations of securities laws.
Pursuant to the Initiative, issuers, such as the City, are able to self-report instances in which securities offering documents for the prior five years may have omitted or misstated material facts concerning the issuer’s past compliance with its responsibility to publicly disclose financial and other material information. Participating issuers have been given until December 1, 2014 to self-report. By participating, issuers may avail themselves of standardized settlement terms that are designed to be more lenient than what might be demanded by the SEC in an enforcement action into the same conduct.
An MCDC self-report of all instances during the past five years of the City’s failure to adequately disclosure the nature of its compliance or noncompliance with its continuing disclosure obligations would enable the Enforcement Division of the SEC to recommend that the SEC accept a “settlement” under which the City consents to the institution of ...
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