August 13, 2013
Fred Harris from the California Community Colleges Chancellor’s Office provided the following information.
Thanks to Vicenti, Lloyd, and Stutzman for providing this breaking news:
The Securities Exchange Commission (SEC) is working to enforce a rule that has been on the books since the 90’s for bond issuers, and California districts are high on the list of those at risk for failure to comply. Rule 15c2-12 requires underwriters to verify that the state or local government issuing bonds will agree to regularly post financial reports about the securities on an on-going basis. There have been warnings in the last few years, but the SEC proved they were serious when they charged an Indiana school district and its underwriter with failure to comply in late July 2013. In 2011, the California Debt and Investment Advisory Commission reported that twenty-five percent of bond issuers in the state were found to be noncompliant, so there could be several districts and governmental agencies vulnerable to an investigation.
The California Society of Municipal Finance Officers published an article on the topic on Monday, August 5, written by Vicenti, Lloyd, and Stutzman. For more information about the current probe, read SEC’s Probe Into Bond Disclosure Compliance Puts Bond Issuers on Alert<http://www.csmfo.org/news/august-2013-mininews/#sec>. For specific instructions regarding bond disclosure compliance, read Protecting Your District’s Ability to Sell Bonds or Other Debt<http://www.vlsllp.com/Press/Articles.asp> (fifth linked article in the list).