Securities and Finance

The SEC has been encouraging municipal securities issuers and underwriters to self-report under the Municipalities Continuing Disclosure Cooperation Initiative ("MCDC Initiative"). The initiative is intended to address "possible violations involving materially inaccurate statements relating to prior compliance with the continuing disclosure obligations specified in Rule 15c2-12 under the Securities Exchange Act of 1934." Issuers and underwriters frequently face important decisions as to whether lack of continuing disclosure with regard to certain items would constitute a "materially inaccurate misstatement" in the SEC's view.

Clients ask us to assist with actual or potential SEC investigations into the materiality of either disclosures made by the issuer or underwriter or the lack of ongoing disclosure by the issuer of information that the SEC may believe is material.

NERA's work in these cases involves a careful analysis of materiality using event studies as well as analysis of individual trade data and matrix pricing. An evaluation of the market efficiency of the security at issue is also an important aspect of the analysis to show whether the information would have been important enough to investors as to change the value of the securities. NERA experts also assist counsel in addressing claims as to whether bond prices moves or would have moved in response to a timely disclosure as well as opine on the size of the price move and whether it differs from the bond price move one typically sees on a day-to-day basis.