The $4.3 trillion municipal securities market finances America's critical infrastructure-our schools, hospitals, roads, and water systems. Yet despite its importance, this market operates under a fractured regulatory framework that has repeatedly failed investors and taxpayers alike.
Drawing on five decades of evidence, this book presents a compelling case for abolishing the Municipal Securities Rulemaking Board (MSRB) and returning its functions to the Securities and Exchange Commission. Through meticulously documented case studies and data-driven analysis, the author demonstrates how the current bifurcated structure-where the MSRB creates rules but lacks enforcement authority-has enabled market manipulation, disclosure failures, and exploitation of regulatory gaps.
From the VRDO rate-rigging scandal that cost municipalities billions, to "phantom bonds" where proceeds never reached their intended public purpose, to systematic pension disclosure deceptions by state governments, this book reveals a disturbing pattern of regulatory failure. These are not isolated incidents but predictable outcomes of an inherently flawed framework.
The solution is clear: a unified regulatory approach under the SEC would provide integrated oversight, enhanced investor protections, and greater accountability. The Tower Amendment's limitations on municipal issuer regulation would remain intact, respecting federalism while restructuring oversight of market participants for greater effectiveness.
This essential reform would protect both investors and municipal issuers while ensuring that our public financial markets serve their true purpose-responsibly funding the infrastructure that underpins American communities.
"A devastatingly thorough critique of municipal market regulation and a pragmatic roadmap for reform."
