September 21, 2010
Thank you for this opportunity to comment on municipal securities regulation.
I suggest respectfully that, in addition to its more general market activities, the Commission consider placing a regulatory focus on the specific municipal market sectors that lead to the greatest incidence of municipal securities defaults and investor losses. A related area needing significant attention is the quality of and disclosure relating to feasibility studies, appraisals and other expert work products that are almost always involved in the riskiest municipal securities offerings.
I am attaching two files in that regard. One identifies the riskiest municipal securities, and the other points out that the Tower Amendment does not purport to restrict either the Commission or the MSRB with respect to private obligated persons.
I acknowledge that the Commission's most significant problem is not the Tower Amendment, per se, but affirmative authority. Yet, as the attachments illustrate, the Commission has prescribed certain specific disclosure content requirements, and with that precedent, should be able to prescribe more. Placing requirements on obligated persons also would be more palatable politically, than for issuers of municipal securities.