The U.S. Securities and Exchange Commission charged the Pennsylvania city of Harrisburg, the state's beleaguered capital, with securities fraud yesterday for allegedly releasing misleading public statements and financial information, Reuters reported yesterday. Harrisburg, which is under state receivership after its finances became mired by a scheme to upgrade a trash incinerator, agreed to settle the charges without admitting or denying the findings, the SEC said. The SEC said that it was the first time it has charged a municipality for making misleading statements outside of securities disclosure documents. Its investigation covered Harrisburg's budget, annual and mid-year financial statements, and a "State of the City" address. Alongside the charges, the SEC issued a report saying that public officials may be liable under federal securities laws for public statements made in the secondary market for municipal securities. According to the SEC, investors had to make trading decisions "based on inaccurate and stale information" about Harrisburg's financial condition during the trash burner crisis, largely because the city did not provide annual financial reports and other notices such as interest payment delinquencies.
http://newsandinsight.thomsonreuters.com/Bankruptcy/News/2013/05_-_May/…
To read the SEC’s press release, please click here: http://www.sec.gov/news/press/2013/2013-82.htm