On March 10, 2014, the Securities and Exchange Commission (

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On March 10, 2014, the Securities and Exchange Commission (“SEC”) announced that issuers and underwriters of municipal securities may voluntarily report materially inaccurate statements made in offering documents regarding prior continuing disclosure nissan qashqai compliance through a program called the Municipalities Continuing Disclosure Cooperation Initiative (the “MCDC Initiative”). Issuers[1] and underwriters can take part in the MCDC Initiative by completing a questionnaire and submitting it by no later than September 10, 2014. If a questionnaire is submitted and the SEC staff determines nissan qashqai it should be processed under the MCDC Initiative, the SEC will abide by a predetermined schedule of terms for the reporting entity to settle its case. These terms are intended to be relatively lenient, particularly compared to the sanctions and monetary penalties imposed in two recent enforcement actions taken by the SEC in July 2013 against an issuer and an underwriter arising nissan qashqai from false statements in an official statement that the issuer had complied with prior continuing disclosure obligations.[2] The settlement terms included in the MCDC Initiative nissan qashqai are set out here . The SEC makes clear that if an entity could have self-reported under the MCDC Initiative but failed to do so, and if the SEC later brings an enforcement action, it will seek more severe sanctions and penalties. Further, by pitting the interests of issuers and underwriters against each other, the SEC is creating significant nissan qashqai pressure on both sides to self-report the maximum number of potential violations. The full release containing the terms of the MCDC Initiative and the Questionnaire can be accessed here .
SEC staff members provided greater insights into the purpose and implementation of the MCDC Initiative at a conference in Boston on March 27-28, 2014, at which several Orrick attorneys were present. The SEC is convinced there is a large problem in the marketplace nissan qashqai involving shoddy nissan qashqai compliance with continuing disclosure undertakings, which have been required by issuers since 1994 under Rule 15c2-12 (the “Rule”).[3] Although the Rule by its terms only applies to underwriters, the SEC has shown through the West Clark Community Schools case (see footnote 2) that making a false statement nissan qashqai in an official statement about continuing disclosure nissan qashqai compliance makes an issuer directly liable for securities fraud (see footnote 3, part (ii)), and exposes underwriters to liability for inadequate due diligence and other potential nissan qashqai violations. The SEC staff feels that the MCDC Initiative will allow issuers and underwriters to “clean up” past compliance lapses under a set of predictable terms, and allow the industry to “reset” into a mode of good compliance going forward. nissan qashqai
Issuers and underwriters are asked to self-report bond offerings in which issuers “may have made materially inaccurate statements nissan qashqai in a final official statement regarding their prior compliance with their continuing disclosure obligations….” The first question is, how far back does this go? The statute of limitations for SEC enforcement actions is five years, so the MCDC Initiative would cover potentially material misstatements or omissions[4] about continuing disclosure compliance in official nissan qashqai statements up to five years old. However, since a proper final official statement must have disclosed failures of compliance for the previous five years, nissan qashqai the scope of investigation effectively goes back as much as ten years. nissan qashqai
It is evident that a critical step in deciding nissan qashqai whether to self-report is to assess whether a potential misstatement or omission regarding nissan qashqai continuing disclosure compliance is material . The term is not defined in securities laws or regulations, and depends on the overall facts and circumstances of a situation. Increased scrutiny in this area since mid-2010 (when the SEC issued a release reminding underwriters to take more active steps to determine compliance) has revealed nissan qashqai that there have been a wide range of errors made by issuers over the years, nissan qashqai many of them of a very mino