WASHINGTON -- The Securities and Exchange Commission's new disclosure guidelines have triggered an investigation by the Maryland attorney general into whether a financial adviser for tax-exempt housing bond issues was compensated twice with state funds for the same work.

Merrill Lynch & Co. disclosed in a May 1 prospectus for the sale of single-family housing bonds that Thomas P. Caine, principal of CGMS Inc. and Maryland's financial adviser on the $125 million deal, received compensation twice for cash flow analyses. The disclosure by Merrill Lynch, a senior managing underwriter for the sale, was made in response to the SEC measures, Maryland officials said.

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