Philadelphia partner Mary Hansen was quoted in a Pittsburgh Post-Gazette article, titled, "Heard Off the Street: Securities and Exchange Commission Targets Municipal Cases." The article discusses charges filed by the SEC against the city of Miami and its former budget director, accusing them of making false and misleading statements related to three 2009 municipal bond offerings that raised $153.5 million.
The city omitted information and made misleading statements in the city budget and failed to submit an annual financial report and audited financial information to the group that maintains the disclosure documents investors rely on.
"It's a signal the SEC is serious about policing municipal securities markets," Mary said.
This was the third time in s as many months that the SEC took on cases involving municipal bond offerings.
"The three cases, as well as one settled earlier this year that accused the state of Illinois of misleading investors about state funding of pension liabilities, should put municipal bond issuers on alert about honoring their disclosure obligations," said Mary.
Two of the cases, Harrisburg and South Miami, agreed to a negotiated settlement of the charges by promising to abide by disclosure requirements in the future.
Mary noted, "Detroit's bankruptcy has focused the attention of taxpayers on the tenuous finances of many states and municipalities. Likewise, the SEC is taking a harder look at the disclosures government officials make about their bond offerings, an initiative municipal bond issuers should respect."
"Municipalities need to take these obligations seriously," she said.
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