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Kings Canyon schools of California charged with misleading investors
By Angela McDaniels
Tacoma, Wash., July 8 – The Kings Canyon Joint Unified School District of California was charged by the Securities and Exchange Commission with misleading bond investors about its failure to provide contractually required financial information and notices, according to an SEC news release.
The SEC found that in three bond offerings between 2006 and 2007, Kings Canyon agreed to disclose annual financial information and notices of certain events.
When it conducted a $6.8 million bond offering in November 2010, Kings Canyon was required to describe any instances where it had failed to comply with its prior disclosure obligations.
The SEC said that in the 2010 offering document, Kings Canyon inaccurately affirmed that there was “no instance in the previous five years in which it failed to comply in all material respects with any previous continuing disclosure obligation.” Because Kings Canyon failed to submit some of the required disclosures relating to the 2006 and 2007 offerings, the November 2010 bond offering document contained an untrue statement of a material fact.
The school district agreed to settle the charges without admitting to or denying the findings.
The case is the first to be resolved under a new SEC initiative to address materially inaccurate statements in municipal bond offering documents, according to the news release.
Under the Municipalities Continuing Disclosure Cooperation 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 initiative launched on March 10 and expires on Sept. 10.
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