Harrisburg, Pa.,|Won’t Fight SEC

HARRISBURG, Pa. (CN) – Harrisburg will not fight, or admit, the SEC’s claim that it defrauded bond investors by lying about the deteriorating state of its finances in issuing or guaranteeing “hundreds of millions of dollars in bonds,” the SEC said.
     Harrisburg is nearly bankrupt and under state receivership, “largely due to approximately $260 million in debt the city had guaranteed for upgrades and repairs to a municipal resource recovery facility owned by The Harrisburg Authority,” the SEC said in a statement. “As of March 15, 2013, Harrisburg has missed approximately $13.9 million in general obligation debt service payments.”
     Harrisburg agreed to settle the SEC’s federal complaint, as is customary with the SEC, without admitting that it had done anything wrong.
     The SEC said in its statement: “The SEC found that Harrisburg failed to comply with requirements to provide certain ongoing financial information and audited financial statements for the benefit of investors holding hundreds of millions of dollars in bonds issued or guaranteed by the city. As a result of Harrisburg’s non-compliance from 2009 to 2011, investors had to seek out Harrisburg’s other public statements in order to obtain current information about the city’s finances. However, very little information about the city’s fiscal situation was publicly available elsewhere. Information that was accessible on the city’s website such as its 2009 budget, 2009 State of the City address, and 2009 mid-year fiscal report either misstated or failed to disclose critical information about Harrisburg’s financial condition and credit ratings.”
     The SEC ordered Harrisburg not to do it again.

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