Thursday, July 10, 2014

California School District Charged with Securites Fraud


No one is above the law, not even a school district. The SEC has charged a California school district with misleading bond investors about its failure to provide contractually required financial information and notices. 

Seal of the U.S. Securities and Exchange Commi...
The case is important as it is the first under a new SEC initiative to address materially inaccurate statements in municipal bond offering documents. According to the press release, the SEC found that in the course of a 2010 bond offering, Kings Canyon Joint Unified School District affirmed to investors that it had complied with its prior continuing disclosure obligations. The statement was inaccurate because between at least 2008 and 2010, the school district had failed to submit some required disclosures. The California school district agreed to settle the charges without admitting to or denying the findings.

Under the Municipalities Continuing Disclosure Cooperation (MCDC) initiative, the SEC’s Enforcement Division agreed to recommend standardized settlement terms for issuers and underwriters who self-report or were already under investigation for violations involving continuing disclosure obligations. The 2014 initiative, launched on March 10, expires on September 10.

The SEC press release and complaint are here - SEC Charges California School District with Misleading Investors.
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