Dodd Bill: Municipal Investment Advisers Must Register
A similar provision has been approved in the House, where the Financial Services Committee is working on a slate of financial regulation bills.
Both the House and Senate provisions on municipalities are responding to SEC's concerns about its limited ability to regulate the municipal securities market.
Dodd's bill, unveiled Tuesday, is the starting point for negotiations with the House and the Obama administration in overhauling financial regulations in the wake of the economic crisis.
According to Dodd's office, financial advisers to municipal securities issuers aren't currently regulated while they have been involved in "pay-to-play" scandals and have recommended unsuitable derivatives for small municipalities, "among other inappropriate actions."
The SEC recently announced a $75 million penalty for J.P. Morgan Securities Inc. for an alleged unlawful kickback scheme that enabled the firm to win business involving municipal-bond offerings and swap-agreement transactions with Jefferson County, Ala.
But the two brokers accused of being at the center of the scheme plan to fight the charges, in part by questioning SEC's authority to bring the lawsuit.
Jefferson County has faced credit-rating downgrades and possible bankruptcy after its investments in over-the-counter derivatives.
The SEC is examining several other municipal contracts.
Dodd's bill also would allow the SEC to give monetary awards to whistleblowers who supply information that leads to sanctions exceeding $1 million.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com
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Publié le 10 novembre 2009 Copyright © 2009 Dowjones
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