CHICAGO - The Securities and Exchange Commission will probably use emergency court action to stop state and local governments from selling municipal bonds if it thinks their offerings are fraudulent, an enforcement division official told bond lawyers meeting here.
Kevin Guerrero, a senior counsel at the muni and public pensions unit in the SEC's enforcement division made the comments during a panel discussion at the National Association of Bond Lawyers' Bond Attorneys' Workshop conference. Guerrero referenced the commission's June enforcement action against Harvey, Ill., when the SEC went to court and filed a successful request to block a planned debt issue by the Chicago suburb after it and its Comptroller, Joseph Letke, allegedly engaged in a several-year fraudulent scheme to divert bond proceeds for improper, undisclosed purposes.
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