SEC - The United States Securities and Exchange Commission
11/21/2024 | Press release | Archived content
Remarks – 2024 Joint Compliance Outreach Program for Municipal Market Participants
Hello, everyone:
As is customary, my comments today are provided in my official capacity as Director of the Office of Municipal Securities (OMS), but do not necessarily reflect the views of the Securities and Exchange Commission (Commission), the Commissioners, or members of the staff.
I want to start by thanking the Commission, FINRA, and MSRB staff as well as our market participants, panelists, and moderators for helping execute this year's Joint Outreach Program. We hear from market participants how important and useful this event is for understanding the actions and activities of the various market regulators. And they are also important for regulators to hear directly from you. I hope this year's event provided useful guidance, insightful discussion, and food for thought. We will also be posting resources related to the Joint Outreach Program on the Commission's website[1] if you want to go back later and review specific items.
In these remarks, I want to summarize some important takeaways from the Joint Outreach Program in the context of some of the things that I am seeing in the municipal market.
As noted in the program's "Statutory Fiduciary Duty Panel," the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) codified a "statutory fiduciary duty" for municipal advisors.[2] It is separate and distinct from MSRB Rule G-42.[3] The statutory fiduciary duty for municipal advisors, like other fiduciary duties, is generally said to require that a municipal advisor act in utmost good faith, use reasonable care to avoid misleading clients, and fully and fairly disclose conflicts of interest.[4] Municipal advisors also owe their municipal entity clients a duty of care and a duty of loyalty.[5]
The statutory fiduciary duty for municipal advisors is activities-focused; it applies when someone acts as a municipal advisor to a municipal entity, i.e., provides advice to or on behalf of a municipal entity client with respect to municipal financial products or the issuance of municipal securities.[6] Actions taken by a municipal advisor for or on behalf of the municipal entity client that constitute municipal advisory activities are subject to the statutory fiduciary duty, even prior to or in the absence of any agreed upon or documented relationship[7] - although the lack of a documented relationship would be a separate violation.[8] Because the fiduciary duty for municipal advisors is activity based, be mindful that even if the agreed upon and documented scope of the relationship between the municipal advisor and its municipal entity client does not explicitly reference such activities, a fiduciary duty would apply if the municipal advisor actually engaged in such activities.[9] A municipal advisor may at any point agree with its municipal issuer client on the services to be performed, to include or exclude certain municipal advisory activities, such as including disclosure-related obligations or excluding pricing obligations.
One common area where the statutory fiduciary duty is implicated is considerations around role switching from municipal advisor to broker-dealer (or vice-versa) and the conflicts that may result.[10] There has been past discussion on this topic in the municipal market,[11] and OMS previously addressed one common role switching question in the Registration of Municipal Advisors, Frequently Asked Questions, 5.2, which is posted on the Commission's website and addresses switching roles from municipal advisor for a municipal entity to underwriter.[12]
For purposes of municipal entities, fiduciary duty concerns and MSRB Rule G-23,[13] generally, prohibit persons from switching from the role of municipal advisor (to a municipal entity) to the role of broker-dealer with respect to the same issuance of municipal securities and, as noted in the Adopting Release, may create fiduciary duty concerns for the municipal advisor.[14] Similar conflicts and concerns arise when switching roles from broker-dealer to the role of municipal advisor when advising on the investment of proceeds or municipal derivative products.[15]
Similar, but more complicated, issues arise when switching roles between municipal advisor and broker-dealer for purposes of obligated persons on conduit issuances.[16] These types of conduit issuance scenarios raise, in my mind, a complex, facts and circumstances dependent analysis that, to me, follows a two-step review. The first step examines whether there is a nexus between the obligated person and an issuance of municipal securities[17], and in the next step I might then try to determine and weigh that nexus with the municipal entity issuer's understanding of its relationship to the broker-dealer/municipal advisor and the activities the broker-dealer/municipal advisor takes with regard to the municipal entity issuer.[18]
I am qualifying my thoughts here with respect to the first step in the analysis, because each situation is facts and circumstances dependent, but on a conduit deal where a municipal entity is not yet involved, "[m]erely advising a client on debt financing alternatives that include conduit financing is not a municipal advisory activity, because the client would not be sufficiently close to being an obligated person with respect to an issuance of municipal securities."[19] Further, "[a]ctivity that never results in solicitation of or actual contact with a municipal entity does not have a sufficient nexus to . . . the issuance of municipal securities" to qualify as municipal advisory activity and trigger role switching issues in a facts and circumstances dependent context.[20]
The flipside of these complex conduit deal issues is what happens when the broker-dealer/ municipal advisor is providing advice that constitutes municipal advisory activity to the obligated person when there is a nexus that exists between the obligated person and the issuance of municipal securities?[21] In such situations, the broker-dealer/municipal advisor could be providing advice that constitutes municipal advisory activity to the obligated person and, potentially, to the municipal entity issuer.[22] The Commission discussed this in the Adopting Release in much more detail than I am able to get into today.[23]
Boiling it down, these situations require analysis of more than just historical statements about role-switching in conduit deals made in the context of G-23.[24] I would say once a nexus exists between the obligated person and the issuance of municipal securities, a municipal entity issuer is involved somewhere in the conflicts and role switching equation, right? So, if the broker-dealer/municipal advisor is providing advice related to municipal advisory activities to the obligated person, the broker-dealer/municipal advisor should be aware of its actions, activities, and advice towards the municipal entity issuer and also the municipal entity issuer's understanding of those actions, activities, and advice.[25] Also, in these situations, which are facts and circumstances dependent, use of an independent registered municipal advisor (IRMA) may, but does not necessarily, indicate that the broker-dealer/municipal advisor is not acting in a municipal advisory role with whichever entity is employing the independent registered municipal advisor if the IRMA exception is not fully perfected.[26]
In contrast, the broker-dealer/municipal advisor may find itself in situations where, for example, it is unclear how the municipal issuer views the advice from or relationship with the broker-dealer/municipal advisor to the obligated person or where there is another municipal advisor (maybe not an IRMA) working for the municipal issuer. If the broker-dealer/municipal advisor finds itself in an unclear situation, the broker-dealer/municipal advisor could consider such things as the municipal entity issuer's level of sophistication and experience, the municipal issuer's understanding of the nature of the relationships among the parties, and the likelihood the municipal issuer is to place significant reliance on the advice provided by the municipal advisor/broker-dealer to the obligated person.[27] If the relationship between the municipal entity and broker-dealer/municipal advisor does rise to a municipal advisory one, the switching of roles could raise regulatory issues based on the fiduciary duty and conflicts created when acting as a municipal advisor to a municipal entity and broker-dealer on the same deal.[28]
Next, I would like to focus on what some see as one of the main roles of municipal advisors, and that is using your knowledge and expertise to ensure your client receives informed advice throughout the municipal financing process.[29] You hear this a lot, there are approximately 55,000 individual issuers of municipal bonds, and the majority are small, infrequent, or unsophisticated issuers.[30] That could mean a small fire authority in Kansas has employees that are great at putting out fires but have no experience with issuing bonds to build a new fire station. In issuing debt, the goal for the issuer is generally to drive down the price the municipal issuer pays in interest on the debt, saving the issuer money (in the form of lower interest rates) over the duration of the bond.[31] This makes increases in price in the "recently issued"[32] market in their bonds different from an increase in price when a company goes to market in an IPO. An IPO allows a company to raise capital by selling equity to shareholders.[33] When the stock price goes up in an IPO or afterwards the company's value is increasing, and shareholder equity increases with it.[34] We also know that this is different than a bond issuance where the bond purchasers are buying debt packaged as a security from the municipal issuer and are not purchasing equity in the municipal issuer.[35]
Not in the spirit of beating a dead horse, but in the spirit of continuing the conversation on the question of method and sale and the relationship to a municipal advisor's fiduciary duty, please note that the Division of Examinations' 2024 Examination Priorities stated, "[e]xaminations will continue to review whether municipal advisors have met their fiduciary duty obligation to clients, particularly when providing advice regarding the pricing, method of sale, and structure of municipal securities."[36] In my statement at last year's Joint Outreach Program and my remarks at the California Debt and Investment Advisory Commission: Municipal Debt Essentials Seminar, I noted my consternation at the amount of negotiated sales in the municipal market given that "negotiated sales consistently deliver inferior pricing and higher costs to both issuers and retail investors."[37] Still, I continue to see reports, like the MSRB's recent "Analysis of Primary vs. Recently Issuer and Competitive vs. Negotiated Municipal Securities Markets," which showed significantly higher prices in the recently issued market on negotiated offerings across all trade sizes compared with competitive offerings: For trades of $100,000 or less between 2019 and 2023, the average price increase in the recently issued market was $12.89 on negotiated deals compared to $5.75 on competitive deals.[38]
I have also seen the studies showing that when a municipal advisor and underwriter are each other's regular issuance partner 20% or more of the time, municipal issuers tend to pay much higher borrowing costs compared to when the underwriter and municipal advisor are not regularly partnered.[39] Further, studies have shown how municipal issuer decision inertia, i.e., the municipal issuer's continued reliance on negotiated sales because it always does negotiated sales or sticking with the same underwriter because that's who it always uses, is not always the best course of action for your client and could result in higher borrowing costs.[40]
I also want to address aspects of what could happen if a municipal issuer begins their debt financing with a specific idea in mind or underwriter in place because I think that could be an area where people run into trouble. It is a Government Finance Officers Association (GFOA) best practice for municipal issuers to hire their municipal advisor prior to undertaking a debt financing and in instances where this is done, it can help avoid some of these problems.[41] Municipal advisors may claim that a deal comes to them where the issuer has already decided on an underwriter, or made up its mind and decided to proceed with a negotiated sale but, as the Commission alleged in its complaint against Comer Capital Group,[42] an underwriter's preexisting, non-binding agreement to do a negotiated sale with an issuer does not absolve a municipal advisor of its fiduciary duty to explore and present alternatives, including alternatives to the preselected underwriter.[43] In my mind, where the contract with the issuer or the course of dealing calls for it, the municipal advisor should be at the table with the municipal issuer when the municipal issuer is making that decision, educating/advising on method of sale, structure, timing, or terms of a deal, which underwriter is offering the best deal and not just the most convenient, and making sure their client --the issuer-- sees all available information and considers all options.[44] And, we know that despite your best advice, clients may have other reasons to proceed with a different course of action.
As for duties related to pricing a deal and post-trade obligations or really anything else, you need to fulfill the duties and obligations in your engagement agreements and be mindful that if pricing or post-trade obligations are not explicitly referenced in the contract or engagement, the fiduciary duty would apply if you actually engaged in such activities or if the course of dealing indicates you engaged (or were supposed to engage) in such activities.[45] That could mean that if you say you are going to deliver a pricing or closing memo, that you do. And, if you say you will do it (or do it), I think that pricing memo probably should not be some boilerplate, cut-and-paste, advertising document and should include specifics to the deal (which might include such informational things like institution of a retail order period or retail priority, over-or-undersubscription rates and how such subscription issues were addressed, tweaks made to amortization schedule or interest rate yields during pricing, details related to order flow or interested purchasers, and even a short explanation or description of the actions you took on behalf of the municipal issuer during the pricing to help them get the best deal).[46] Also, if your engagement agreement with an issuer specifies that you are going to monitor secondary market breaks to provide better pricing, than per the agreement, you need to do that, and, in my mind, it would be helpful for both you and your clients if you used that information to help guide pricing on the next deal (as part of the fiduciary duty obligations you may owe to future clients when advising on their municipal financings).[47] This is an area where municipal advisors need to be mindful of books and records requirements and policies and procedures requirements because copies of pricing memos (which are either related to municipal advisory activities, material to making a recommendation, or memorialize the basis for that recommendation) need to be kept.[48]
Books and records requirements allow us to transition to an item of much recent discussion, off-channel communications. Just in the past year, the Commission announced the settlement of multiple enforcement actions related to off-channel communications touching, basically, every group of professionals subject to Commission regulation within the municipal market including municipal advisors, [49] credit rating agencies,[50] and broker-dealers, broker-dealer investment advisors, or affiliated investment advisors[51] for record keeping and supervision violations related to off-channel communications.
We are aware that many entities feel that they did not receive sufficient guidance with respect to these requirements, and I think this raises some important issues. First of all, I will note that, in addition to the language of the respective rules, which require retention of all types of communication for broker-dealers and all types of written communication for municipal advisors, the Commission and MSRB periodically reminded the market of these responsibilities with general reminders about electronic recordkeeping as well as specific actions about off-channel communications.[52] For instance, the Division of Examinations issued Risk Alerts for municipal advisors on electronic recordkeeping in 2017 and 2022.[53] One of the very first legal maxims most of us learned is that ignorance of the law is no defense. Regulated entities should stay engaged with their regulator and should not reasonably expect to be spoon fed answers to all their questions by regulators. However, I do think that regulators can also try to provide as much additional clarity about our rules as we can and to be engaged with regulated entities in order to understand and appreciate compliance difficulties.
Breaking down the off-channel issue, to me it is a compliance issue that involves the interaction between the Exchange Act, Commission Rules, and MSRB Rules but really comes down to reasonableness, supervision, and testing of policies and procedures.[54] Now, I am simplifying, but, for example, the regulatory framework around books and record retention and supervision requires municipal advisors to keep and maintain books and records that include all written communications sent by the municipal advisor relating to municipal advisory activities, material to making a recommendation, or memorializing the basis for that recommendation, regardless of the format of such written communications, for the required period of time.[55] The regulatory framework also requires the municipal advisor to have reasonably designed, written supervisory policies and procedures (WSPs) addressing how to accomplish required record retention. Part of that reasonable design is reasonable supervision and testing (at least annually) to make sure there is compliance: [56] To me, this last part means supervision and testing to make sure the WSPs are working to capture the items required to be kept and preventing prohibited actions by employees. These are ongoing and active requirements.
Going through the Municipal Advisor Off-Channel Communications Orders, without singling anyone out, a common theme comes up throughout each firms' actions. That theme generally is that the firms' WSPs, supervision, or supervisory systems were not, at least in my reading of the orders, reasonably supervised (or tested) in a way to ensure books and records compliance (and some were not reasonably designed to ensure the same).[57] Those WSPs did not, for example, reasonably address or capture what happens if employees did not comply with the WSPs, what happens if supervisors never checked to see if the employees were following the WSPs, or what happens if the supervisors did not follow the WSPs themselves (which was happening in some instances).[58] Rhetorically, is it reasonable to have a procedure that requires employees to sign a document or not to use certain types of communications and then not take any action if persons in firm management or that are responsible for compliance are aware that the procedure is being violated? What about if persons in firm management or that are responsible for compliance are also violating the procedure themselves?
While the previously mentioned Municipal Advisor Off-Channel Communications Orders did not turn on a failure of testing, I guess I wonder what might have happened if the annual test of the WSPs checked to see if the WSPs were reasonably drafted to work (as required by MSRB Rule G-44)?[59] Would the compliance issues related to capturing written communications have been found by the firms and a new system developed to make sure employees/supervisors were not creating written communications related to municipal advisory activities that were not properly documented and maintained in accordance with books and records requirements? And, in this situation, I note that the requirement is not to have perfectly written WSPs.[60] The standard is reasonably designed to achieve compliance with applicable securities laws and regulations.[61] If it was determined that WSPs are not working through testing and supervision, it means making a reasonable effort to redesign or update the WSPs to try to solve the problems that came up during supervision and testing including by making more communication systems "on channel" by retaining them. That approach seems pretty reasonable to me.
While I am discussing the Municipal Advisor Off-Channel Communications Orders, I want to pivot from the supervision, testing, and record retention failures to quickly go back to the concept of what is a municipal advisory activity or related to municipal advisory activity. I could parrot the definition from the Exchange Act Rule or Adopting Release, but I think it is more helpful to pull some ideas from the off-channel communications orders because each order details different written communications sent regarding municipal advisory activity or relating to municipal advisory activity.[62] Again, I am not trying to pick on any one specific firm, and I suggest reading all the orders. Selecting a few specific descriptions of what the Division of Enforcement found, you will see examples of communications such as a municipal advisor principal and employee exchanging texts about the underwriter's coupon selection for a client's bond offering and the changes they would recommend;[63] a municipal advisor texting a municipal issuer client advice about how to structure its bond redemption for tax purposes;[64] a municipal advisor texting a municipal issuer client about the client's preliminary official statement including providing comments on the body of the disclosure document (including numbers within tables);[65] and a municipal advisor texting a municipal issuer client regarding the construction budget for an affordable housing project, and the allocation of bond proceeds to pay post-construction interest and other fees to bond indenture accounts.[66] There are more examples in other orders, and going forward, I think the facts related to the municipal advisory activities that were not retained and that resulted in the violations in the Municipal Advisor Off-Channel Communications Orders may work as a useful set of some examples of what types of actions might be related to municipal advisory activities. You will note that the examples of violative conduct in the orders did not include texts about what to order for lunch, that simply informed a client to look for an email, or that informed the working group whether a person was going to be on camera on a videoconference or whether someone was running late to a meeting.
The last compliance issue I want to address today is the importance of meeting your basic registration and filing obligations.[67] In 2022, the Division of Examinations issued observations noting "significant overlap between the types of registration and filing weakness observed in the 2017 Risk Alert and those that continue to be the most commonly observed deficiencies and weaknesses in recent examinations."[68] The alert specifically noted the following frequently seen and recurrent problems: 1.) filings with inaccurate, incomplete, or inconsistent information; 2.) failure to amend and untimely amendments; 3.) failure to meet the annual filing requirement; and 4.) failure to pay or delinquent MSRB fees.[69] Yet, I continue to see the same Commission-related registration and filing issues on public EDGAR, and the MSRB continues to report the same. We can't ignore the problems suggested by these violations. These type of violations then require our attention not only because registration and filing is one of the simplest parts of compliance with the Municipal Advisor Registration Rule, but also because what we have seen is that the firms that have these registration and filing issues have many other issues such as no or poorly drafted WSPs, supervision failures, recordkeeping failures, conflict disclosure failures, fiduciary duty and MSRB Rule G-42 issues, and many other systemic problems.[70]
In case you are not aware, the Commission's website, and OMS-specific portions of it, are a great resource to review frequently asked questions, find information/instructions on filing required forms, see recent municipal related enforcement actions, and review recent speeches or statements from OMS staff.[71] The Division of Enforcement and the Division of Examinations also have specific portions of the website dedicated to important items such as Enforcement Actions, Examinations Priorities, and Risk Alerts that are worth reviewing.[72] The MSRB and FINRA websites also have a wealth of helpful information available.
And yes, all of this information may also seem overwhelming but in those cases I encourage you to call the Commission, FINRA, or MSRB, anonymously if needed, with any questions or concerns you have about how to comply with the regulations that affect you. Regulators can at least help you navigate the thicket of rules, guidance, and compliance resources to identify the ones most relevant to your questions that you can read and analyze on your own. Having a regulator inform you of existing resources and where to find them amongst decades of written materials can be a major help. I don't think enough people who struggle with compliance questions do this - and so I want to encourage everyone again to utilize these resources.
With that, I want to thank the Commission staff, with a special thank you to the Denver Regional Office for helping us with the space, as well as to our partners at FINRA and MSRB, and our municipal market participants for putting this together and thank you for joining. We look forward to doing it again in the future.
[1] See SEC, Compliance Outreach Program for Municipal Advisors, available at https://www.sec.gov/compliance/complianceoutreach/compliance-outreach-program-municipal-advisors.
[2] 15 U.S.C. § 78o; 15 U.S.C. § 78o-4(c)(1); 15 U.S.C. § 78o-4(e)(4).
[3] See MSRB Rule G-42 and Supplementary Material.
[4] See In the Matter of Eric Hall & Assoc., LLC, and Eric Hall (settled action), Exchange Act Release No. 84224 (Sept. 20, 2018) (citing SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 194 (1963))
("It is well settled that fiduciaries must act in utmost good faith, use reasonable care to avoid misleading clients, and fully and fairly disclose conflicts of interest.").
[5] See In the Matter of Fieldman Rolapp & Assoc., Inc. and Anna Sarabian (settled action), Exchange Act Release No. 98510 (Sept. 25, 2023) ("Section 15B(c)(1) of the Exchange Act . . . provides that any municipal advisor shall be deemed to have a fiduciary duty, which includes a duty of care, to any municipal entity for whom such municipal advisor acts as a municipal advisor and makes it unlawful for such municipal advisor to, among other things, 'engage in any act, practice, or course of business which is not consistent' with that duty of care."). See also In the Matter of William R. Hough & Co. (settled action), Exchange Act Release No. 33-7826 (April. 6, 2000) (finding a financial advisor's failures to make necessary disclosures in an advance refunding transaction in which the financial advisor also sold Treasury securities, at excessive, undisclosed markups, to its client as principal breached the fiduciary duty owed to its client); Dave A. Sanchez, Director, Office of Municipal Securities, Remarks at the California Debt and Investment Advisory Commission Municipal Debt Essentials Seminar: Responsibilities of Regulated Entities to Municipal Issuers (Sept. 26, 2024), available at https://www.sec.gov/newsroom/speeches-statements/remarks-california-debt-investment-advisory-commission-municipal-debt-essentials-seminar. See also MSRB Rule G-42 (addressing duty of care and duty of loyalty in supplemental materials thereto), available at https://www.msrb.org/sites/default/files/2022-08/MSRB-Rule-G-42-for-Municipal-Advisors.pdf.
[6] 15 U.S.C. § 78o-4(c)(1); 15 U.S.C. § 78o-4(e)(4).
[7] 15 U.S.C. § 78o-4(c)(1); See Adopting Release for the Municipal Advisor Registration Rule (Adopting Release), 78 FR at 67475 (providing, "[T]he Exchange Act, as amended by the Dodd Frank Act, grants the MSRB regulatory authority over municipal advisors and imposes a fiduciary duty on municipal advisors when advising municipal entities."). Exchange Act Rule 15Ba1-1(e) defines "municipal advisory activities" to include "providing advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities, including advice with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues." 17 CFR 240.15Ba1-1(e)(1) (emphasis added); MSRB, Municipal Advisors: Understanding Standards of Conduct (April 2016), (noting "Rule G-42 does not supersede, for example, any more restrictive state or other federal law regarding fiduciaries."), available at https://www.msrb.org/sites/default/files/2022-08/MSRB-Rule-G-42-for-Municipal-Advisors.pdf.
[8] See MSRB Rule G-42(c) (providing that "[a] municipal advisor must evidence each of its municipal advisory relationships by a writing or writings created and delivered to the municipal entity or obligated person client prior to, upon or promptly after the establishment of the municipal advisory relationship" and providing the minimum requirements the writing(s) must meet).
[9] See 15 U.S.C. § 78o-4(c)(1). See also Adopting Release, 78 FR at 67475; Exchange Act Rule 15Ba1-1(e).
[10] See In the Matter of Central States Capital Markets, LLC et al., Exchange Act Release No. 77369 (settled action), March 15, 2016, (finding, "respondents therefore breached their fiduciary duty to the City by failing to disclose: (a) the fact that certain Central States employees also worked for the Broker-Dealer; (b) the fact that certain Central States employees were performing both municipal advisor services and underwriting services for the Offerings; and (c) the fact that certain Central States employees had a conflict of interest because they were receiving a direct financial benefit from the underwriting services."), available at https://www.sec.gov/files/litigation/admin/2016/34-77369.pdf.
[11] See Garret, Daniel G., Conflicts of Interest in Municipal Bond Advising and Underwriting, Brookings (June 2020), available at https://www.brookings.edu/wp-content/uploads/2020/07/Garrett.pdf.
[12] See SEC, Registration of Municipal Advisors, Office of Municipal Securities, Frequently Asked Questions, available at https://www.sec.gov/info/municipal/mun-advisors-faqs.
[13] MSRB Rule G-23, which (outside of limited exceptions for arranging placement of the entire issue for or on behalf of the issuer or meeting remarketing activities provisions) prohibits persons from switching from the role of "financial advisor" to the role of underwriter with respect to the same issuance of municipal securities. See MSRB Rule G-23 available at https://www.msrb.org/Rules-and-Interpretations/MSRB-Rules/General/Rule-G-23.
[14] See Adopting Release, 78 FR at 67512 (footnote omitted) (stating "[i]t is important to note that the following advice would be outside the scope of an underwriting for purposes of this exclusion: (1) advice on investment strategies; (2) advice on municipal derivatives; and (3) advice otherwise identified by the Commission to be outside the scope of an underwriting. Such advice generally is not within the scope of serving as an underwriter on an issuance of municipal securities and can raise issues that implicate the policy objectives of municipal advisor registration."). If a broker-dealer acts as a municipal advisor to a municipal entity with respect to an issuance of municipal securities, it owes a fiduciary duty to the municipal entity with respect to that issue and must not take any action inconsistent with its fiduciary duty to the municipal entity, or that is in contravention of any rule of the MSRB. See 15 U.S.C. § 78o-4(c)(1); Adopting Release, 78 FR at 67475. See also Exchange Act Rule 15Ba1-1(e). Additionally, the broker-dealer must comply with MSRB Rule G-23, which (outside of limited exceptions for arranging placement of the entire issue for or on behalf of the issuer or meeting remarketing activities provisions) prohibits persons from switching from the role of financial advisor to the role of underwriter with respect to the same issuance of municipal securities.See MSRB Rule G-23.
[15] See MSRB Rule G-23. MSRB Rule G-23(e) does have a limited remarketing exception if "the financial advisory relationship in connection with such issue has been terminated for a period of at least one (1) year prior to such broker, dealer, or municipal securities dealer being selected to serve as successor remarketing agent." Id.
[16] Notably, 15B of the Exchange Act provides for the protection of both municipal entities and obligated persons. See 15 U.S.C. 78o-4(b)(2)(C); Adopting Release, 78 FR at 67485. The Commission did note in the Adopting Release that "[a] person will not be a municipal advisor to an obligated person until the obligated person has begun the process of applying to, or negotiating with, a municipal entity to issue conduit bonds on behalf of the obligated person." Adopting Release, 78 FR at 67485.
[17] See Adopting Release, 78 FR at 67485 (providing that for purposes of advice provided to an obligated person that there should be "a sufficient nexus to municipal financial products or the issuance of municipal securities to require registration as municipal advisor.").
[18] See Adopting Release, 78 FR at 67480 (discussing that "whether a person provides advice depends on all the relevant facts and circumstances," that "the more individually tailored the information to a specific municipal entity…or a targeted group of municipal entities … with respect to municipal financial products or the issuance of municipal securities … the more likely it … constitutes advice under the municipal advisor definition" and noting that the "content, context, and manner of presentation of the information communicated" to a particular municipal entity is also important for the determination).
[19] Adopting Release, 78 FR at 67485.
[20] Id.
[21] See, e.g., Adopting Release, 78 FR at 67485-86 (discussing nexus between obligated person and municipal financial products or securities). See generally MSRB, "Application of Board Rules to Financial Advisory Services Rendered to Corporate Obligors on Industrial Development Bonds" (May 23, 1983), available at https://www.msrb.org/Application-Board-Rules-Financial-Advisory-Services-Rendered-Corporate-Obligors-Industrial.
[22] See Adopting Release, 78 FR at 67485 (discussing when a person becomes an obligated person). One possible factor that could show the broker-dealer/municipal advisor was not acting as a municipal advisor to the obligated person could be use of an independent registered municipal advisor. Provided certain requirements are met, Exchange Act Rule 15Ba1-1(d)(3)(vi) exempts any person engaging in municipal advisory activities in a circumstance in which a municipal entity or obligated person is otherwise represented by an independent registered municipal advisor with respect to the same aspects of a municipal financial product or an issuance of municipal securities from the municipal advisor definition. See Adopting Release, 78 FR at 67510.
[23] See generally Adopting Release, 78 FR at 67485-86.
[24] See generally MSRB, "Application of Board Rules to Financial Advisory Services Rendered to Corporate Obligors on Industrial Development Bonds" (May 23, 1983).
[25] See, e.g., Adopting Release, 78 FR at 67485-86 (discussing nexus between obligated person and municipal financial products or securities). See generally MSRB, "Application of Board Rules to Financial Advisory Services Rendered to Corporate Obligors on Industrial Development Bonds" (May 23, 1983). The Commission has also briefly touched on the timing aspect of municipal advisory activity, noting that "advice with respect to the issuance of municipal securities should be construed broadly from a timing perspective to include advice throughout the life of an issuance of municipal securities, from the pre-issuance planning stage for a debt transaction involving the issuance of municipal securities to the repayment stage for those municipal securities." Adopting Release, 78 FR at 67490 (internal quotations omitted).
[26] Provided certain requirements are met, Exchange Act Rule 15Ba1-1(d)(3)(vi) exempts any person engaging in municipal advisory activities in a circumstance in which a municipal entity or obligated person is otherwise represented by an independent registered municipal advisor with respect to the same aspects of a municipal financial product or an issuance of municipal securities from the municipal advisor definition. See Adopting Release, 78 FR at 67510.
[27] See Adopting Release, 78 FR at 67480 (discussing that "[w]hile the determination of whether a person provides advice depends on all the relevant facts and circumstances, the more individually tailored the information to a specific municipal entity or obligated person . . . the more likely it will be a recommendation that constitutes advice."); Adopting Release, 78 FR at 67580 (discussing that an important factor in the advice inquiry is "whether, considering its content, context and manner of presentation, the information communicated to the municipal entity or obligated person reasonably would be viewed as a suggestion that the municipal entity or obligated person take action or refrain from taking action regarding municipal financial products or the issuance of municipal securities."); Adopting Release, 78 FR at 67511 (discussing how a broker, dealer, or municipal securities dealer serving as underwriter may handle the provision of advice within the underwriter exclusion).
[28] Note that if the broker-dealer/municipal advisor is acting as a municipal advisor to the municipal entity, the "underwriter exclusion" is not available. See Adopting Release, 78 FR at 67511. As noted in the Answer to Question 5.2 of OMS' Registration of Municipal Advisors FAQs, once the broker-dealer/municipal advisor acts in a municipal advisory role, it must comply with MSRB Rule G-23 regarding switching from the role of municipal advisor to the role of underwriter with respect to the same issuance of municipal securities. See also MSRB Rule G-23 (citing for reference and not for interpretive purposes). See generally MSRB, "Application of Board Rules to Financial Advisory Services Rendered to Corporate Obligors on Industrial Development Bonds" (May 23, 1983) (citing for reference and not for interpretive purposes).
[29] See MSRB, What to Expect from Your Municipal Advisor (Jan. 2016), available at https://www.msrb.org/sites/default/files/What-to-Expect-from-Your-Municipal-Advisor.pdf. See also In the Matter of Fieldman Rolapp & Assoc., Inc. and Anna Sarabian (settled action) (discussing how the municipal advisor's provision of incorrect advice based on flawed mathematical assumptions to a municipal issuer resulted in a breach of the duty of care); MSRB Rule G-42 (discussing duty of care).
[30] See SIFMA, The Role of Municipal Securities Broker's Brokers in the Municipal Markets, available at https://www.sifma.org/wp-content/uploads/2017/05/the-role-of-municipal-securities-brokers-brokers-in-the-municipal-markets.pdf.
[31] Id.
[32] See Bagley, John A., Quiceno Rosero, Tatiana, and Vieira, Marcelo, Analysis of Primary vs. Recently Issued
and Competitive vs. Negotiated Municipal Securities Markets 2 (Aug. 2024), available at
https://www.msrb.org/sites/default/files/2024-08/Primary-vs-Recently-Issued-and-Competitive-vs-Negotiated-Markets-for-Municipal-Securities_0.pdf (defining "recently issued" as "customer purchases during the first seven days of secondary market trading after the first execution date").
[33] See SEC, Going Public, available at https://www.sec.gov/resources-small-businesses/going-public.
[34] See generally, BlackRock, What are equity Investments?, available at https://www.blackrock.com/us/individual/education/equities.
[35] See MSRB, Competitive Bidding for Primary Offerings of Municipal Securities: More Bids, Better Pricing for Issuers? (July 2020), available at https://www.msrb.org/sites/default/files/MSRB-Competitive-Bidding.pdf (describing the competitive offering process).
[36] SEC, Division of Examinations, 2024 Examination Priorities, available at https://www.sec.gov/files/2024-exam-priorities.pdf.
[37] See Dave A. Sanchez, Director, Office of Municipal Securities, Closing Remarks at the 2023 Compliance Conference (Dec. 7, 2023), available at https://www.sec.gov/newsroom/speeches-statements/sanchez-remarks-compliance-conference-120723.
[38] See Analysis of Primary vs. Recently Issued and Competitive vs. Negotiated Municipal Securities Markets (Aug. 2024); Dave A. Sanchez, Director, Office of Municipal Securities, Remarks at the California Debt and Investment Advisory Commission Municipal Debt Essentials Seminar: Responsibilities of Regulated Entities to Municipal Issuers (Sept. 26, 2024), available at https://www.sec.gov/newsroom/speeches-statements/remarks-california-debt-investment-advisory-commission-municipal-debt-essentials-seminar. See also Wu, Simon Z. and Ostroy, Nicholas J., Primary Offerings of Municipal Securities: Impact of COVID-19 Crisis on Competitive and Negotiated Offerings (Oct. 2022), available at https://www.msrb.org/sites/default/files/2022-10/Competitive-and-Negotiated-Offerings.pdf.
[39]See Moldogaziev, Temirlan and Luby, Martin, Too Close for Comfort: Does the Intensity of Municipal Advisor and Underwriter Relationship Impact Borrowing Costs?: MA-Underwriter Interaction and Borrowing Costs, Public Budgeting & Finance (July 2016) (stating "it appears that if municipal advisors have 20 percent or more of their total annual interactions with the same underwriters their TICs are about 6 to 11 basis points greater than for municipal advisors that have less than 20 percent of their total interactions with the same set of underwriting firms."), available at https://www.researchgate.net/publication/304995076_Too_Close_for_Comfort_Does_the_Intensity_of_Municipal_Advisor_and_Underwriter_Relationship_Impact_Borrowing_Costs_MA-Underwriter_Interaction_and_Borrowing_Costs.
[40] See Liu, Gao, Self-Selection Bias or Decision Inertia? Explaining the Municipal Bond 'Competitive Sale Dilemma' (March 2018), available at https://ssrn.com/abstract=3014183.
[41] See GFOA, Best Practices, Selecting and Managing Municipal Advisors (Feb. 28, 2024), available at https://www.gfoa.org/materials/selecting-and-managing-municipal-advisors.
[42] SEC v. Comer Capital Group, LLC, Litigation Release No. 25935, Jan. 31, 2024, available at https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25935 (Comer Capital Group, LLC and Brandon L. Comer consented to entry of a final judgment without admitting or denying the allegations in the SEC's complaint).
[43] See Complaint at 31-34, SEC v. Comer Capital Group, LLC et al., Case No. 19-cv-4324, N.D. Ill., filed June 17, 2019, ("The District's letter of intent with IFS specifically provided that it could select a different underwriter for the transaction. Comer also understood that the District was not required to use IFS and could select another underwriter at any time prior to the closing of the Bond transaction. . . . Despite this, once they were retained by the District, Comer Capital and Comer made no effort to assess IFS's experience or qualifications to sell the Bonds. They did not inquire about the process by which the District had selected IFS to conduct the underwriting. They did not inquire as to whether the District had considered other underwriters. . . . The Defendants' failure to provide contracted-for advice to the District regarding underwriter selection was a breach of their fiduciary duty."); Dave A. Sanchez, Director, Office of Municipal Securities, Remarks at the California Debt and Investment Advisory Commission Municipal Debt Essentials Seminar: Responsibilities of Regulated Entities to Municipal Issuers (Sept. 26, 2024), available at https://www.sec.gov/newsroom/speeches-statements/remarks-california-debt-investment-advisory-commission-municipal-debt-essentials-seminar.
[44] See id (describing Defendant's alleged actions that breached fiduciary duty).
[45] See 15 U.S.C. § 78o; 15 U.S.C. § 78o-4(c)(1); 15 U.S.C. § 78o-4(e)(4). See also In the Matter of Eric Hall & Assoc., LLC, and Eric Hall (citing SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 194 (1963))
("It is well settled that fiduciaries must act in utmost good faith, use reasonable care to avoid misleading clients, and fully and fairly disclose conflicts of interest."); In the Matter of Fieldman Rolapp & Assoc., Inc. and Anna Sarabian (settled action), (discussing how municipal advisor's provision of incorrect advice based on flawed mathematical assumptions to municipal issuer resulted in a breach of duty of care.); Complaint at 31-34, SEC v. Comer Capital Group, LLC et al., (alleging "The Defendants' failure to provide contracted-for advice to the District regarding underwriter selection was a breach of their fiduciary duty."); MSRB Rule G-42 and supplementary materials (discussing fiduciary duty of care and fiduciary duty of loyalty).
[46] See 15 U.S.C. § 78o; 15 U.S.C. § 78o-4(c)(1); 15 U.S.C. § 78o-4(e)(4). See also In the Matter of Eric Hall & Assoc., LLC, and Eric Hall (citing SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 194 (1963))
("It is well settled that fiduciaries must act in utmost good faith, use reasonable care to avoid misleading clients, and fully and fairly disclose conflicts of interest."); In the Matter of Fieldman Rolapp & Assoc., Inc. and Anna Sarabian (settled action), (discussing how municipal advisor's provision of incorrect advice based on flawed mathematical assumptions to municipal issuer resulted in a breach of duty of care.); Complaint at 31-34, SEC v. Comer Capital Group, LLC et al., (alleging "The Defendants' failure to provide contracted-for advice to the District regarding underwriter selection was a breach of their fiduciary duty."); MSRB Rule G-42 and supplementary materials (discussing fiduciary duty of care and fiduciary duty of loyalty).
[47] See Complaint at 31-34, SEC v. Comer Capital Group, LLC et al., (alleging "The Defendants' failure to provide contracted-for advice to the District regarding underwriter selection was a breach of their fiduciary duty."); MSRB Rule G-42 and supplementary materials (discussing fiduciary duty of care obligations); MSRB, Municipal Advisors: Understanding Standards of Conduct, (noting "specific duties derived from the broader duty of care require a municipal advisor, for example, to: possess the degree of knowledge and expertise needed to provide a particular client informed advice; to make a reasonable inquiry as to the facts that are relevant to a client's determination as to whether to proceed with a course of action or that form the basis for any advice provided to the client; and have a reasonable basis for any advice provided to the client.").
[48] See Section 17(a)(1) of the Exchange Act; Exchange Act Rule 15Ba1-8; MSRB Rule G-8(h)(i); MSRB Rule G-9; and MSRB Rule G-44. Note that a municipal advisor has obligations to maintain and preserve books and records pursuant to the Exchange Act beyond its obligations under MSRB Rule G-8. Specifically, Exchange Act Rule 15Ba1-8(a)(4) requires a municipal advisor to maintain a copy of any document created that was material to making a recommendation to a municipal advisor client or that memorializes the basis for that recommendation. Id. This obligation applies to recommendations as used in the Exchange Act and is not limited to an MSRB Rule G-42 "Recommendation." Id. See also MSRB, FAQs Regarding MSRB Rule G-42 and Making Recommendations (June 2018), available at https://www.msrb.org/sites/default/files/MSRB-G-42-Recommendations-FAQ.pdf.
[49] See Press Release, SEC, SEC Charges 12 Municipal Advisors with Recordkeeping Violations (Sept. 17, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-132 (the "Municipal Advisor Off-Channel Communications Orders").
[50] See Press Release, SEC, SEC Charges Six Credit Rating Agencies with Significant Recordkeeping Failures (Sept. 3, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-114.
[51] See Press Release, SEC, Sixteen Firms to Pay More Than $81 Million Combined to Settle Charges for Widespread Recordkeeping Failures (Feb. 9, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-18; Press Release; SEC, Twenty-Six Firms to Pay More Than $390 Million Combined to Settle SEC's Charges for Widespread Recordkeeping Failures (Aug. 14, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-98; Press Release, SEC, Advisory Firm Atom Investors, Charged with Recordkeeping Violations, Avoids Civil Penalty Because of Self-Reporting, Substantial Cooperation, and Prompt Remediation (Sept. 23, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-143;
Press Release, SEC, Eleven Firms to Pay More Than $88 Million Combined to Settle SEC's Charges for Widespread Recordkeeping Failures (Sept. 24, 2024), available at https://www.sec.gov/newsroom/press-releases/2024-144.
[52] See National Exam Program Risk Alert, Office of Compliance Inspections and Examinations, Observations from Investment Advisor Examinations Relating to Electronic Messaging (Dec. 14, 2018), available at https://www.sec.gov/files/OCIE%20Risk%20Alert%20-%20Electronic%20Messaging.pdf. See also Press Release, SEC, JPMorgan Admits to Widespread Recordkeeping Failures and Agrees to Pay $125 Million Penalty to Resolve SEC Charges (Dec. 17, 2021), available at https://www.sec.gov/newsroom/press-releases/2021-262; SEC, Division of Examinations, 2023 Examination Priorities (Feb. 7, 2023), available at https://www.sec.gov/files/2023-exam-priorities.pdf. The MSRB issued guidance related to the retention of text messages in 2019. See MSRB Rule G-21 Interpretations, FAQs regarding the Use of Social Media under MSRB Rule G-21, on Advertising by Brokers, Dealers or Municipal Securities Dealers, and MSRB Rule G-40, on Advertising by Municipal Advisors (August 23, 2019), No. 9.
[53] See Risk Alert, Division of Examinations, Recent Observations from Municipal Advisor Examinations (Aug. 22, 2022), available at https://www.sec.gov/municipal-advisor-risk-alert-2022.pdf; National Exam Program Risk Alert, Office of Compliance Inspections and Examinations, Observations from Municipal Advisor Examinations (Nov. 7, 2017), available at https://www.sec.gov/files/observations-municipal-advisor-examinations.pdf.
[54] Section 17(a)(1) of the Exchange Act requires municipal advisors to make and keep for prescribed periods such records, furnish such copies thereof, and make and disseminate such reports as the Commission, by rule, prescribes as necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the Exchange Act. Exchange Act Rule 15Ba1-8 requires that municipal advisors make and keep true, accurate, and current originals or copies of all written communications received, and originals or copies of all written communications sent, by such municipal advisor relating to municipal advisory activities, regardless of the format of such communications, and for such records to be maintained and preserved for a period of not less than five years, the first two years in easily accessible places. MSRB Rule G-8(h)(i) requires municipal advisors to make and keep current all books and records described in Exchange Act Rule 15Ba1-8(a)(1)-(8), which includes all written communications relating to municipal advisory activities. MSRB Rule G-9(h)(i) requires the municipal advisor to preserve these records for a period of not less than five years. MSRB Rule G-44, requires municipal advisors to, among other things, implement, and maintain a system to supervise the municipal advisory activities of the municipal advisor and its associated persons that is reasonably designed to achieve compliance with applicable securities laws and regulations, including applicable MSRB rules. MSRB Rule G-44 also requires municipal advisors to implement processes to establish, maintain, review, test and modify written compliance policies and WSPs and review such supervisory systems at least annually.
[55] See Section 17(a)(1) of the Exchange Act; Exchange Act Rule 15Ba1-8; MSRB Rule G-8(h)(i); MSRB Rule G-9; and MSRB Rule G-44. Note again that "recommendation" as used in Exchange Act Rule 15Ba1-8(a)(4) applies to recommendations as the term is used in the Exchange Act and is not limited to a MSRB Rule G-42 "Recommendation." See MSRB, FAQs Regarding MSRB Rule G-42 and Making Recommendations (for further explanation).
[56] See MSRB Rule G-44; Hester M. Peirce and Mark T. Uyeda, Commissioners, A Catalyst: Statement on Qatalyst Partners LP (Sept. 24, 2024), available at https://www.sec.gov/newsroom/speeches-statements/statement-peirce-uyeda-qatalyst-09242024 (discussing their thoughts related to the reasonableness standard). The MSRB released guidance to assist municipal advisors with development of reasonable WSPs including considerations related to testing and "periodically review[ing], at least annually, the supervisory procedures and compliance policies to ensure they are reasonably designed to achieve compliance with applicable rules." See MSRB, Considerations for Developing a Municipal Advisory Supervisory System and Compliance Program (Jan. 2017), available at https://www.msrb.org/sites/default/files/2022-09/MSRB-Rule-G-44-Considerations.pdf. The MSRB suggests that "[w]hen reviewing its policies and procedures, a municipal advisor should consider, at a minimum: [a]ny compliance matters that arose since the previous review; [a]ny changes in municipal advisory activities of the municipal advisor or its affiliates; and [a]ny changes in applicable rules that might suggest a need to revise the municipal advisor's written compliance policies or supervisory procedures." Id. See also note 49 supra (discussing MSRB Rule G-44).
[57] In the Matter of Acacia Financial Group, Inc. (settled action with admissions), Exchange Act Release No. 101038 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101038.pdf; In the Matter of Caine Mitter and Associates Inc. (settled action with admissions), Exchange Act Release No. 101039 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101039.pdf; In the Matter of CFX Inc. (settled action with admissions), Exchange Act Release No. 101040 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101040.pdf; In the Matter of CSG Advisors, Inc. (settled action with admissions), Exchange Act Release No. 101044 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101044.pdf; In the Matter of PFM Financial Advisors LLC (settled action with admissions), Exchange Act Release No. 101041 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101041.pdf; In the Matter of Phoenix Advisors, LLC (settled action with admissions), Exchange Act Release No. 101042 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101042.pdf; In the Matter of Kaufman, Hall & Assoc., LLC and Ponder & Co. (settled action with admissions), Exchange Act Release No. 101043 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101043.pdf; In the Matter of Montague DeRose & Assoc., LLC Exchange Act Release No. 101045 (settled action with admissions), Exchange Act Release No. 101045 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101045.pdf; In the Matter of Public Resources Advisory Group, Inc. (settled action with admissions), Exchange Act Release No. 101046 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101046.pdf; In the Matter of Specialized Public Finance, Inc. (settled action with admissions), Exchange Act Release No. 101047 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101047.pdf; In the Matter of Zions Public Finance, Inc. (settled action with admissions), Exchange Act Release No. 101048 (Sept. 17, 2024), available at https://www.sec.gov/files/litigation/admin/2024/34-101048.pdf. The Municipal Advisor Off-Channel Communications Orders for the 12 individual firms are all available by accessing the Press Release: SEC Charges 12 Municipal Advisors with Recordkeeping Violations at https://www.sec.gov/newsroom/press-releases/2024-132 and clicking on the individual links for each order or by following the links above.
[58] Id.
[59] See MSRB Rule G-44; MSRB, Considerations for Developing a Municipal Advisory Supervisory System and Compliance Program.
[60] See MSRB Rule G-44. See also Hester M. Peirce and Mark T. Uyeda, Commissioners, A Catalyst: Statement on Qatalyst Partners LP (Sept. 24, 2024).
[61] See MSRB Rule G-44, which requires municipal advisors to, among other things, establish, implement, and maintain a system to supervise the municipal advisory activities of the municipal advisor and its associated persons that is reasonably designed to achieve compliance with applicable securities laws and regulations, including applicable MSRB rules. See also Hester M. Peirce and Mark T. Uyeda, Commissioners, A Catalyst: Statement on Qatalyst Partners LP (Sept. 24, 2024).
[62] Exchange Act Rule 15Ba1-1(e) defines "municipal advisory activities" to include "providing advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities, including advice with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues," as well as "solicitation of a municipal entity or an obligated person." 17 CFR 240.15Ba1-1(e)(1). The Commission Orders for the 12 individual firms are all available by accessing the Press Release: SEC Charges 12 Municipal Advisors with Recordkeeping Violations at https://www.sec.gov/newsroom/press-releases/2024-132 and clicking on the individual links for each order.
[63] In the Matter of Acacia Financial Group, Inc.
[64] In the Matter of Caine Mitter and Associates Inc.
[65] In the Matter of CFX Inc.
[66] In the Matter of CSG Advisors, Inc.
[67] See Dave A. Sanchez, Director, Office of Municipal Securities, Closing Remarks at the 2023 Compliance Conference (Dec. 7, 2023), available at https://www.sec.gov/newsroom/speeches-statements/sanchez-remarks-compliance-conference-120723.
[68] See Risk Alert, Division of Examinations, Recent Observations from Municipal Advisor Examinations (Aug. 22, 2022), available at https://www.sec.gov/municipal-advisor-risk-alert-2022.pdf.
[69] Id.
[70] Id.
[71] SEC, Office of Municipal Securities, available at https://www.sec.gov/about/divisions-offices/office-municipal-securities.
[72] SEC, Division of Enforcement, available at https://www.sec.gov/about/divisions-offices/division-enforcement; SEC, Division of Examinations, available at https://www.sec.gov/about/divisions-offices/division-examinations.