On September 14, 2016, the City of Miami, Florida and its former budget director were found guilty of securities fraud in connection with three municipal bond offerings in 2009 and other disclosures made to investors. This case is the first federal jury trial by the Securities and Exchange Commission (the “SEC”) against a municipality or its officers for violations of federal securities laws.

The SEC charged the City and the former budget officer in 2013, noting materially misleading statements regarding certain interfund transfers with respect to the 2009 bond offerings and misleading information in the City of Miami’s Comprehensive Annual Financial Reports for fiscal years 2007 and 2008. This action highlights the heightened regulatory enforcement environment in the municipal bond industry. As we advise our clients, the ultimate responsibility for the truth and accuracy of the information contained in the official statement or other bond offering documents is that of the issuer and its officials and employees.   In the SEC’s press release following the verdict, the SEC’s Director, Division of Enforcement stated “we will continue to hold municipalities and their officers accountable, including through trials, if they engage in financial fraud or other conduct that violates the federal securities law.”