SEC’s Charges Against New Jersey Are First Step - Barrons.com
IT’S A JUNGLE OUT THERE IN municipal-bond land. So the Securities and Exchange Commission has taken up a machete, determined to tame this $2.8 trillion briar patch that it believes poses a subprime-sized threat to the financial system.
The commission will keep the heat on the market this year and well into the next in an effort to persuade Congress to repeal the 1972 Tower amendment, which prevents the SEC from requiring muni issuers to file disclosure documents before they sell securities to the public. The new Dodd-Frank bank reform law requires studies of the efficacy of repealing Tower. Small municipalities oppose the measure, claiming that compliance costs would be too steep.