WASHINGTON -- The
Chairman Mary Schapiro said the inquiry will be led by Commissioner Elisse Walter and will involve a series of field hearings that will be held across the country to solicit views from municipal market participants.
Schapiro also called for broker-dealers to be prohibited from serving as financial advisers to municipal issuers and then turning around and underwriting bonds from those issuers. Although the Municipal Securities Rulemaking Board’s Rule G-23 permits dealers to switch roles in this fashion, Schapiro said, “This is a classic example of a conflict of interest” and the MSRB “should change G-23 and forbid this practice.”
Schapiro made the remarks in a speech that was read by Andrew “Buddy” Donohue, head of the SEC’s division of investment management at the