On March 10, 2014, the Securities and Exchange Commissions Enforcement Division (the SEC) announced the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative to provide issuers and underwriters the opportunity to self-report instances of material misstatements in bond offering documents regarding the issuers prior compliance with its continuing disclosure obligations. The deadline for self-reporting under the MCDC Initiative is September 10, 2014. While SEC is encouraging issuers and underwriters to participate by offering predetermined and more lenient settlement terms, the GFOA is urging members to exercise caution and familiarize themselves with the details of the initiative before consenting to engage in this program. For example, though the terms of the initiative preclude SEC from imposing monetary fines on participating issuers, the SEC reserves the right to pursue separate enforcements against individuals within a government who it deems to be culpable of the misstatements. Additional information on the predetermined settelement terms and individual liability under the MCDC initiative was published by SEC on March 10 is available here.
The GFOA has also developed an alert document to provide members with additional background and guidance information on the initiative, which is available here.