SEC Warns Investors Of Potential Muni Bond Oversights

Law360, New York (March 19, 2012, 7:21 PM EDT) -- Some Wall Street banks may be skimping on their due-diligence duties when underwriting state and local government bond offerings, putting investors in the $3.7 trillion municipal market at risk, particularly in the weak economy, the U.S. Securities and Exchange Commission warned on Monday.

During recent reviews, the SEC found that some broker-dealers did not maintain adequate written evidence showing they had paid sufficient attention to the fiscal health of the state and local governments for which they were selling securities. This is particularly dangerous these days,...
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