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SEC Charges KeyBanc Capital Markets Inc. for Violating Municipal Bond Disclosure Law

March 7, 2023

File No. 3-21336

March 7, 2023 - The Securities and Exchange Commission today announced that KeyBanc Capital Markets Inc. has agreed to settle charges that it failed to comply with municipal bond offering disclosure requirements under Rule 15c2-12 of the Securities Exchange Act of 1934.

According to the order, between September 2017 and December 2021, KeyBanc sold new issue municipal bonds without obtaining required disclosures for investors in 47 municipal bond offerings. KeyBanc purported to rely on an exemption to the typical disclosure requirements called the limited offering exemption, but it did not take the steps necessary to satisfy the exemption's criteria. The order also found that KeyBanc did not have specific policies and procedures reasonably designed to comply with the exemption.

The order finds that KeyBanc willfully violated Section 15B(c)(1) of the Exchange Act, Rule 15c2-12 under the Exchange Act, as well as Rule G-27 of the Municipal Securities Rulemaking Board. Without admitting or denying the SEC's findings, KeyBanc agreed to settle the charges, cease-and-desist from future violations of those provisions, be censured, and pay $263,607.66 in disgorgement plus prejudgment interest of $33,528.55 and a $100,000 civil money penalty.

The SEC staff is conducting investigations of other firms' reliance on the limited offering exemption. Firms that believe their practices do not comply with the securities laws are encouraged to contact the SEC at

The SEC's investigation was conducted by Sue Curtin, Kevin Currid and Rebecca Olsen of the Enforcement Division's Public Finance Abuse Unit.

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