Feds Plan to Rein in Muni Bond Market.

Kiplinger Business Forecasts, March, 2007

Byline: Matthew Mogul

Federal regulators will crack down on the $2.3-trillion municipal bond market, a reaction to alleged abuses by bond dealers and local government officials. Cities and communities throughout the U.S. sell bonds to raise money for new roads, schools, sewage plants and all sorts of other public works.

Disclosure has emerged as a key issue in investigations by the Securities and Exchange Commission (SEC), the Justice Department and the Internal Revenue Service. Late last year, the SEC sanctioned San Diego for failing to provide important information when it sold $260 million in bonds in 2003-2004. City officials failed to tell investors that they anticipated trouble meeting pension obligations to municipal employees, a condition that...

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