Securities Law & Disclosure

Hawkins is an industry leader in securities law and disclosure matters as applied to public finance.  Our attorneys have a comprehensive understanding of the complex disclosure standards and practices affecting public securities offerings, which are derived from sources as diverse as the general antifraud provisions of the federal securities laws, judicial interpretations, state laws, common law, government regulation of market participants such as broker-dealers, organizations such as the Municipal Securities Rulemaking Board, and industry practice and voluntary guidelines such as (i) the Considerations in Preparing Disclosure in Official Statements Regarding an Issuer’s Pension Funding Obligations published by the Municipal Market Task Force on Public Pension Disclosure, (ii) the Disclosure Guidelines from the National Federation of Municipal Analysts (“NFMA”), and (iii) the Disclosure Guidelines for State and Local Government Securities from the Government Finance Officers’ Association (“GFOA”), among others. 

 

Hawkins has acted as Disclosure Counsel for offerings of every type throughout the nation.  In addition, we have provided disclosure services in connection with bond counsel, special tax counsel, underwriter’s counsel and borrower’s counsel engagements, in both negotiated and publicly advertised offerings.  Our knowledge of and ability to handle complex disclosure matters are invaluable resources to our clients. Hawkins’ disclosure practice, in addition to the general representation of our clients, consists of two principal areas: (i) our engagements as Disclosure Counsel, and (ii) the delivery of opinions (negative assurance letters) regarding the disclosure in an official statement, whether serving as bond counsel, underwriter’s counsel, or otherwise.

 

            Representative Engagements

We serve as Disclosure Counsel to various governmental entities throughout the country and are consistently ranked among the top Disclosure Counsel firms nationwide, measured in terms of bond volume.  Below are a few key representative engagements in which the firm is involved.

 

State of New York.  In early 1994, Hawkins was selected as the first Disclosure Counsel by the State of New York Division of the Budget and we continue to serve in that capacity.  The Division of the Budget is primarily responsible for preparing and updating all market disclosure regarding the New York State government and its finances.  Initially, this engagement involved working with the Division of the Budget to re-examine its ongoing disclosure procedures.  With the firm’s help, the Division of the Budget rewrote the State’s basic disclosure documents, and reformatted them as an “Annual Information Statement.”  Investors were put on notice that quarterly updates would be issued and that any material changes between such predictable updates would be issued as a supplement as necessary.  Procedures were regularized for all contributing State agencies, officials and authorities whereby material changes would be provided to centralized budget staff and the new formalized State information statement would be made available to other issuers for use in their official statements.  Currently, Hawkins continues to provide regular advice to the State of New York, through its Division of the Budget, with respect to general obligation and State appropriation credit financings.

District of Columbia.  Since 2000, Hawkins has served as Disclosure Counsel to the District of Columbia (Washington, D.C.) (the “District”).  The District, which had experienced financial difficulties in the past that threatened its access to major capital markets, needed a clear and comprehensive disclosure document to present to potential investors.  As part of this engagement, Hawkins was tasked with drafting the disclosure to reflect the District’s transition from a federally-appointed fiscal control board to independent governance.  We also restructured the District’s official statement into two parts: (i) one part that describes the terms of the particular securities being offered, including any credit enhancement, and (ii) one part that describes the District’s general financial condition.  This structure permits the District to more efficiently update its disclosure and provides a more “user friendly” document for investors.  This restructured disclosure document has proven to be invaluable to the District, especially when multiple, separate District financings are coming to the market around the same time.

City of San Diego.  In March 2004, Hawkins was selected as Disclosure Counsel for the City of San Diego after certain disclosure irregularities came to light.  In response to certain disclosures regarding the City’s pension system, which were the subject of multiple enforcement actions by the Securities and Exchange Commission (“SEC”), the City adopted a disclosure ordinance that created a Sarbanes-Oxley-like disclosure regime for the City, including the establishment of a Disclosure Practices Working Group (the “DPWG”), consisting of senior City officials and Hawkins as Disclosure Counsel.  The DPWG is responsible for reviewing all official statements and continuing disclosure filings of the City, and all disclosure provided by the City to certain specified related entities.  As part of this engagement, Hawkins assisted the City in developing the written controls and procedures that govern the operation of the DPWG, and has also provided disclosure training to the City Council and the City’s financial officials and staff.

Rhode Island.  In 2011, we were retained as Special Disclosure Counsel for pension-related matters by the State of Rhode Island following an announcement by the State Treasurer that a prior State bond issue was under investigation by the SEC.  As part of such engagement, partners John McNally and Bruce Van Dusen assisted the State in rewriting the State’s disclosure relating to the State’s pension liabilities, developed new written disclosure procedures for the State and provided training for numerous State officials as to disclosure responsibilities of issuers under federal securities laws.

Hawkins also serves as Disclosure Counsel to the City of Newport Beach (California), the City of San Francisco (California), and the State of Nevada, among others.

            Disclosure Training and Disclosure Procedures and Policies

In connection with our securities law disclosure practice, Hawkins has been engaged by governmental entities to provide training to their staff, officials and other representatives in connection with their disclosure obligations under federal and state securities laws, whether the disclosure appears in the form of official statements, continuing disclosure annual reports, comprehensive annual financial reports, credit rating agency materials or investor website materials.  Hawkins also assists clients in the development of written procedures and policies governing an issuer’s disclosure documents, the absence of which the SEC has cited as a factor contributing to inadequate disclosures by issuers.

            Securities Expertise and National Recognition

John McNally is the firm’s principal securities law partner.  Mr. McNally is a frequent speaker regarding the application of the federal securities laws to public finance transactions, served as Vice-Chair (2000-2001) and Chair (2002) of NABL’s Securities Law and Disclosure Committee, and was a co-editor of the initial three editions of the Federal Securities Laws of Municipal Bonds Deskbook. 

In connection with the turmoil in the auction rate market in 2007-2008, Mr. McNally prepared on behalf of NABL the federal securities law portion of the February 27, 2008, memorandum “Commonly-Asked Questions regarding Securities and Tax Implications of Auction Rate Bond Market Turmoil,” and co-authored the January 26, 2010, NABL advisory “Certain Federal Securities Law Aspects of ‘Tax Credit’ Bonds.” 

Mr. McNally served as  Project Coordinator for the Third Edition of Disclosure Roles of Counsel in State and Local Government Securities Offerings, a joint publication of the American Bar Association and NABL that was published in October 2009, which was referred to by the New York Times as “the new disclosure bible for municipal bond lawyers.” 

During Mr. McNally’s term as NABL President, NABL (with Mr. McNally as Co-Reporter) led a Municipal Market Task Force on Public Pension Disclosure, which included the AICPA, GFOA, NAST, NFMA, and SIFMA, among other organizations.  In May 2012, the Task Force published its guidance, entitled “Considerations in Preparing Disclosure in Official Statements Regarding an Issuer’s Pension Funding Obligations.”

In September 2010, Mr. McNally presented testimony, at the SEC’s request, at the SEC’s inaugural field hearing in San Francisco.  These field hearings were conducted across the country to provide input to the SEC as they considered what regulatory or legislative measures might be appropriate regarding the municipal market, and such measures are described in the SEC’s Report on the Municipal Securities Market (July 31, 2012).


 

Contact

John M. McNally

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