The Commission’s Municipalities Continuing Disclosure Cooperation Initiative has been a significant success. Under the Initiative the agency has filed settled enforcement actions against firm’s representing 96% of the market share for municipal underwritings, improving future disclosures in the market for investors. Yesterday the SEC settled with an additional 71 issuers.

The Initiative is a voluntary self-reporting program focused on material misrepresentations and omissions in municipal bond offering documents. The Commission’s 2012 Municipal Market Report identified the failure of issuers to comply with their continuing disclosure obligations as a significant issue for investors. The Initiative focuses on this point and encourages issuers to self-report in return for favorable settlement terms for underwriters, issues and obligated persons.

The cases filed yesterday involved 71 issuers and obligated persons in 45 states who sold municipal bonds using offering documents that contained materially false statements or omissions about their compliance with continuing disclosure obligations. Under those obligations investors receive annual financial reports on an ongoing basis.

Each of the settling issuers consented to the entry of a cease and desist order and agreed to certain undertakings designed to prevent a reoccurrence of the conduct in the future. Typical of the settled actions filed yesterday is the proceeding involving the City of Alameda, California. In the Matter of the City of Alameda, Ad. Proc. File No. 3-17421 (August 24, 2016). There the Order alleged that in certain official statements for municipal securities the Respondent affirmatively stated that it had materially complied with prior agreements to provide continuing disclosure when in fact it had not. The Order alleged violations of Securities Act Section 17(a)(2). To resolve the proceeding the City consented to the entry of a cease and desist order based on the Section cited in the Order. It also agreed to comply with certain undertakings which require the City to establish appropriate written policies and procedures, have periodic training regarding its continuing disclosure obligations, update past delinquent filings and certify compliance with the undertakings.