Negligent Disclosure and Imputed Scienter: Recent SEC Enforcement Actions Against Municipal Bond Issuers
The post on our securities litigation and compliance blog titled "SEC Steps Up Scrutiny of Municipal Bonds: Recently Filed Enforcement Actions" surveys recent SEC enforcement actions against municipal bond issuers. As discussed in the post, the SEC's charges in these actions include charges based on issuer negligence (versus the "scienter" standard of knowingly or recklessly misleading disclosure applicable to private securities law claims against municipal bond issuers), and also notes the SEC's position that an officer's state of knowledge can be imputed to a municipal bond issuer for purposes of establishing the issuer's "scienter" in a securities fraud action.