The US regulatory agency claimed that the financial information provided to municipal bond investors was either partial or obsolete and the city made fraudulent declaration in its budget report, annual and mid-year financial statements.
Due to Harrisburg failure to comply with financial information guidelines during 2009 to 2011, investors had to search Harrisburg’s other public statements in order to obtain a clear picture of the city’s financial condition.
Further, the city posted very little or misleading information pertaining to its 2009 budget, 2009 State of the City address, and 2009 mid-year fiscal report and concealed critical information about its financial condition and credit ratings.
SEC enforcement division’s municipal securities and public pensions unit chief Elaine Greenberg said that Harrisburg failed to provide accurate and timely material information to investors, subsequently secondary market investors made trading decisions based on inaccurate and stale information.
Without admitting or denying the allegation, Harrisburg has agreed to settle the charges as well as to cease and desist from committing or causing violations of Section 10(b) of the Securities Exchange Act.
