White Paper: SEC Issues Bulletin on Antifraud Provisions

by Bill Rhodes and Kim Magrini
April 7, 2020

The Office of Municipal Securities (the Office) of the Securities and Exchange Commission (SEC) issued a staff legal bulletin (the Bulletin) on February 7, 2020. The Bulletin described the views of the Office staff on the application of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 (together, the antifraud provisions) to certain disclosure scenarios, and clarified their view that any public statement made by issuers of municipal securities and obligated persons, including elected governmental officials, that is reasonably expected to reach investors and the trading markets are subject to the same antifraud standards applicable to primary offerings.

In the Bulletin, the staff expresses its view that it is consistent with the SEC’s prior statements that antifraud provisions apply to all statements of a municipal issuer that provide information reasonably expected to reach investors and the trading markets, regardless of the intended primary audience, the medium of delivery, and the municipal issuer’s compliance with its continuing disclosure obligations.

We have prepared a white paper to help municipal issuers determine how the Bulletin affects them.

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