The municipal bond market is highly vulnerable to fear based abuse because of its mediocre performance in public disclosure and a weak secondary market. While the municipal market is no stranger to abusive practices in bond issuance and secondary market pricing, its greatest vulnerability is in its failure to police ongoing disclosure compliance. Remember that the municipal secondary market is not a truly competitive market and even less so when the required public information filings are not being made. An opportunity to profit from investors fearing the worst as they tend to do when the information flow is not there. So how does one hold back on the information flow and create an information vacuum:Own or gain control of 25% or more of the bonds.

Source: Forbes August 09, 2021 17:37 UTC