SEC Charges BNY Mellon, Oppenheimer, Other Firms With Municipal Disclosure Failures

Without admitting or denying the SEC’s findings, the firms agreed to settle the charges, cease and desist from future violations of those provisions, be censured and pay the following monetary relief:

BNY Mellon: $656,833.56 in disgorgement and prejudgment interest and a $300,000 penalty
TD Securities: $52,955.92 in disgorgement and prejudgment interest and a $100,000 penalty
Jefferies: $43,215.22 in disgorgement and prejudgment interest and a $100,000 penalty

“I applaud the excellent work of the Division’s Public Finance Abuse Unit in bringing these first-ever actions in the $4 trillion municipal bond space,” said Gurbir Grewal, director of the SEC’s Division of Enforcement in a statement. “We encourage underwriters to examine their practices and to self-report any failures to us before we identify them ourselves.”

The SEC’s complaint against Oppenheimer, filed in federal district court in Manhattan, charges the same violations 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.

As a result of its findings, the SEC said staff has begun investigations of other firms’ reliance on the limited-offering exemption.

Firms that believe their practices do not comply with the securities laws are encouraged to contact the SEC at [email protected].