BROWSE BY TOPIC
Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
Muni Bond Underwritings – Missing Due Diligence Records
by Howard Haykin
Cabrera Capital Markets, a FINRA member firm since 1981, agreed to pay a $25K fine to settle FINRA charges that it failed to maintain records evidencing sufficient due diligence on municipal bond issuances in which it was the lead underwriter.
FINRA FINDINGS. Between August of 2012 and October of 2013, Cabrera was lead underwriter on 5 municipal bond issuances ranging in size from $8 million to $150 million. For each of the issuances Cabrera failed to maintain records evidencing sufficient due diligence was performed to form a reasonable belief that certain key representations made in the offering disclosure documents were true and complete.
- While Cabrera maintained due diligence files for each deal, the extent of documentation contained in the files varied from deal-to-deal.
- Statements provided by Cabrera's representatives indicated that additional due diligence had been performed for which documentation was not maintained in the due diligence files – e.g., email correspondence, analyses of information gathered.
- Cabrera's WSPs were not reasonably designed to achieve compliance with Rule 15c2-12 because they failed to provide specific direction for the gathering and retention of documents evidencing due diligence when acting as a lead underwriter of municipal issuances.
SEC Rule 15c2-12 (Continuing Disclosure) requires dealers, when underwriting certain types of municipal securities, to ensure that the state or local government issuing the bonds enters into an agreement to provide certain information to the MSRB about the securities on an ongoing basis.
This case was reported in FINRA Disciplinary Actions for December 2017.
For details on this case, go to ... FINRA Disciplinary Actions Online, and refer to Case #2015043640701.