The market was relatively small at the time the regulations were established in the 1930s.

But it has grown exponentially in recent years, with more than $2,400bn in municipal securities outstanding – more than the gross domestic product of China, according to the SEC.

Last year alone, more than $430bn in new municipal bonds were issued, about the size of the US defence budget.

Up to another third of the market is held indirectly through money market funds, mutual funds, and closed-end funds.

Yet the SEC's authority is limited to enforcing the anti-fraud provisions of US securities laws in the trading of munis.

Unlike in the corporate bond and other securities markets, the regulator's remit does not extend to assessing disclosures by muni bond issuers to ensure they are transparent.

Last year the city of San Diego was sanctioned by the SEC for having hidden billions of dollars in projected pension and healthcare liabilities to investors in its municipal bonds in the biggest case of such fraud since the late 1990s.

Saying there was an "urgent need" to improve the quality and the availability of disclosure documents, Mr Cox said: "One would think, given the size and importance of this market, and the prevalence of individual investors and older Americans in muni trading and investing, that investors in municipal bonds can rest assured that their interests are fully protected by the same high standards that operate everywhere else in the US capital markets. Not exactly. And not even close."

"The fact is, even large issuers of municipal securities generally don't have policies and procedures to ensure accurate disclosure," Mr Cox told a town hall meeting in Los Angeles.

He suggested that legislation establish a "limited regulatory regime" that would provide that the offering the offering documents and periodic reports provided to investors contain information similar to what they were accustomed to seeing for other securities they own.

It could also mandate that issuers of municipal bonds use US Gaap accounting standards, and give the SEC oversight of the Governmental Accounting Standards Board (GASB).

"A cornerstone of reform in this area would be to ensure that private companies who access the municipal market indirectly by using municipal issuers as conduits will meet the same requirements that municipal issuers themselves must meet," Mr Cox said.

The move is the latest example of attempts by US regulators to update rules governing securities issuance in place since the 1930s. Such rules are among a host of issues blamed for holding back the competitiveness of the US capital markets.

Vito Fossella, a republican congressman from New York, welcomed Mr Cox's initiatives, saying: "The quality and timely disclosure of the financials of muni issuers has been lacking. There needs to be greater transparency to protect investors, stop fraud and prevent a recurrence of the near defaults we've seen in recent years."

The appeals court concluded that U.S. District Judge Stanley R. Chesler erred in not allowing the plaintiffs to amend their complaint with additional materials. Chesler had ruled on the grounds that those materials were acquired as a result of a consensual discovery agreement.

The panel said the district judge needs to determine whether the additional materials would affect the lawsuit's merit.

Since it is a shareholder suit, the plaintiffs normally would have been required to first make a demand upon the company's board of directors. But the plaintiffs said such a demand would have been futile at the time they began the lawsuit.

"Of course, we express no opinion about whether the newly acquired facts that are included in the amended complaint will alter this analysis," the 3rd Circuit judges wrote. "The allegations must not simply demonstrate an aloof or negligent board, but nonfeasance that rose to the level of egregiousness or bad faith."

"We look forward to presenting our arguments anew to the district court under the guidance provided by the appellate court today," said Ted Mayer, an attorney for Merck. "Given that today's ruling did not challenge the reasoning of the lower court in previously dismissing the lawsuit, we believe that the outcome should be the same."

A message left with an attorney for the plaintiffs was not immediately returned.

"I have read the (plea) agreement, and I accept responsibility," Crutchfield told U.S. Judge J. Daniel Breen.

Defense attorney William Farmer characterized the money that Crutchfield admitted taking as a "gratuity" rather than a bribe.

"They gave him a gratuity _ thanks for all your help _ long after he had already agreed to support this bill," Farmer said outside court.

Crutchfield and former Sen. Kathryn Bowers, D-Memphis, were the last of the Tennessee Waltz lawmakers still facing trial. The others have pleaded guilty or been convicted at trial.

Bowers' attorney, William Massey, said she would plead guilty on Monday.

"She brings this one blemish to the courtroom but a lifetime of good work and a positive history in the community," Massey said. "We hope to convince the judge it's not necessary to punish her severely."

If prison time is ordered, he said, "that's what she'll do. She's strong."

Tennessee Waltz indictments were returned in May 2005, charging the five with taking payoffs from a company called E-Cycle Management, which turned out to be a creation of the FBI.

Farmer said that Crutchfield, who has served in the General Assembly for 31 years, plans to resign "in due time," before the Legislature returns to session in January.

Crutchfield still will be eligible for a $42,000 annual pension because his membership in the state's retirement system predated changes in a law designed to strip benefits from convicted lawmakers.

He faces a maximum of five years in prison and a $250,000 fine, though federal guidelines for a first-time offender would call for a much lighter sentence. Sentencing was set for Nov. 28.

The indictment against Crutchfield accused him of splitting $12,000 in bribes with a so-called "bagman" and former lobbyist, Charles Love. Love pleaded guilty and was to testify against Crutchfield at trial.

Prosecutors say the Tennessee Waltz investigation is ongoing.

Pushing through a crowd of reporters and photographers outside the Memphis courthouse, Crutchfield refused to talk about Tennessee Waltz.

"I'm ready to go home to Chattanooga right now," he said.

Crutchfield was first elected to the state House in 1956 and served 14 terms in the Senate. He was Senate Democratic leader for six years until losing a caucus vote about five months before the Tennessee Waltz investigation became public.

"It is our hope that this does not obscure what was a record of noteworthy public service. Senator Crutchfield represented the people of his district with distinction for a very long time," Democratic caucus chairman Joe Haynes said in a statement.

In all, 11 people have been indicted on Tennessee Waltz charges, including several officials in Memphis and Chattanooga. Nine of those charged, including Crutchfield, now stand convicted.

A court of appeals had overruled the circuit court in December 2005, saying Tietsworth's case could be amended to include warranty and contract claims. The state Supreme Court ruled Thursday that the circuit court has no authority to reopen the amended case.

Harley-Davidson (nyse: HOG - news - people ) spokesman Bob Klein said the company would not comment until it had reviewed the decision. Tietsworth's lawyer, Ted Warshafsky, also declined to comment before reading the decision.

Harley-Davidson sent letters in January 2001 to Tietsworth and 140,000 other owners of 1999 and early 2000 models built with the Twin Cam 88 and Twin Cam 88B engines. The company told owners the rear cam bearing in some bikes had failed but would probably not cause engine failure. Harley extended its warranty for the part and made cam repair kits available for $495.

Tietsworth's complaint, which later involved four other owners, said the problem increased riders' safety risks and decreased the value of their Harleys. A circuit court judge threw out the original case, saying Tietsworth and others failed to show actual damages or economic loss, and its decision was eventually upheld by the state Supreme Court.

In 2004, Tietsworth asked a court to amend his original complaint to include contract and warranty claims. Thursday's Supreme Court decision ended that effort.

The Supreme Court also has issued recent rulings that could make it tougher for investors to bring class-action claims against corporations. In one case, the court said that plaintiffs must show convincing evidence that fraud occurred or else a lawsuit can be dismissed at the pre-trial stage.

Fifty-nine federal securities cases requesting class-action status were filed in the first six months of this year, down 42 percent from an average mid-year filing rate of 101 from the 1996-to-2005 period, according to the study by legal research firm Cornerstone Research and Stanford University Law School.

Courts must certify lawsuits as class-actions. Many cases end up getting tossed out by judges before they reach that stage. If class-actions do get certified, the vast majority end up getting settled rather than going to trial.

The number of filings this year was up slightly from 53 cases in the same period in 2006, but it still marks the fourth consecutive six-month period with below average filings, the report found.

"We've now had two years worth of extremely low filing activity," said Joseph Grundfest, a Stanford University law professor. "This is starting to look like a permanent shift, not a transitory phenomenon."

In June, the State Department announced that employment visa numbers were available for all people seeking employer-sponsored green cards, except unskilled workers. The announcement meant that as early as this past Monday, Citizenship and Immigration Services would begin accepting applications, which require a lengthy process including certified documents and medical exams.

But an update posted Monday on the State Department Web site said 60,000 such numbers were no longer available because of "the sudden backlog reduction efforts by Citizenship and Immigration Services offices during the past month," meaning no further applications would be authorized, effective immediately.

The department called the backlog reduction efforts an "unexpected action" and said employment visa numbers would be available Oct. 1.

Ptasinska—who flew from Chicago to Lincoln, Neb., on Monday in hopes of being among the first to submit a green card application—is seeking

a ruling that would keep the application from being rejected, according to her attorney Ira Azulay.
The lawsuit names several government officials and agencies, including the U.S. Citizenship and Immigration Services, the U.S. Department of State and Secretary of State Condoleezza Rice.

State Department spokeswoman Leslie Phillips said that the agency does not comment on litigation. Calls to Citizenship and Immigration Services went unanswered.

Immigration groups like the American Immigration Lawyers Foundation claim thousands of people across the country have spent time and money on attorneys and the application.

Spokesman Tim Vettel said the foundation is in the process of preparing a similar lawsuit.