March 21, 2011
Simply put, in the spirit of transparency and meaningful disclosure, a firm should disclose in writing whether it will be working either as a broker-dealer or as a municipal advisor, prior to beginning any work for a municipal issuer. A broker-dealer should clearly disclose up-front its potential conflict of interest between its investor-customers and its issuer-customer in a manner that will allow a municipality to make an informed choice to use a broker-dealer instead of a municipal advisor. A municipality should know, in advance, whether or not it will be receiving advice on the structuring and method of sale of its bonds from someone who has a fiduciary duty to the municipality.