Securities Law Section

Message from the Chair

Section Chair: 

Charles Niemeier
Williams & Connolly LLP
Washington, D.C.

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The Federal Bar Association - Securities Law Section is a proud sponsor of the virtual museum and archive of the history of financial regulation at  While the museum is free and accessible to everyone at all times, the Section will highlight specific material and information within the museum on securities law issues in the coming months, providing current and prospective Section members with unique insight and context.

It once promised to be “too cheap to meter,” but, since the 1970s, nuclear power has proven expensive for investors, most recently after nuclear plant builder Westinghouse filed for bankruptcy, temporarily dragging down the share prices of two major utilities.  Far more devastating was the June 1983 default of a nuclear project undertaken by the Washington Public Power Supply System (WPPSS).  Appropriately nick-named “Whoops,” it was funded by the sale of municipal bonds.  Since they had been issued during the economically turbulent late 1970s and early 1980s, the bonds offered sky-high yields, but, because they were “munis,” investors considered them safe.

Bond counsel believed them safe also—if anything went wrong, a consortium of utilities was obligated to take on the costs.  But the courts invalidated that provision, and 75,000 investors were devastated.  They justifiably claimed never to have known how dangerous their investments were.  Documents generated during the fallout included letters from legislators to the Commission, expert testimony from SEC veteran Wallace Timmeny, and a landmark SEC Report on the Regulation of Municipal Securities.

The uproar and investigations centered around the nature of the municipal market.  The 1933 Securities Act set rigorous disclosure standards for corporate issuers.  Congress considered requiring the same from municipal issuers 42 years later, but met stiff resistance.  The “Tower Amendment” to the 1975 Securities Acts Amendments formed a firewall between municipal issuers and disclosure.  But the WPPSS default left Chairman Ruder determined “that steps be taken to ensure investor protection in the municipal securities markets.”  The SEC’s solution was ingenious:  Rather than require disclosure from municipal issuers, it obligated broker-dealers to provide detailed official statements—and these could come only from issuers. Adopted in June 1989, 28 years ago this month, Rule 15c2-12, since amended and updated, continues to ensure the transparency of the muni market.


The Source: June 2017

The Source: March 2017

The Source: December 2016

The Source: September 2016

The Source: June 2016

The Source: March 2016

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