SEC Settles Charges with Illinois City Stemming from Fraudulent Bond Offering Scheme

The SEC announced that the city of Harvey, Illinois has agreed to settle charges stemming from an enforcement action filed in June 2014, which alleged that the city and its comptroller had engaged in a fraudulent bond offering.

The SEC complaint alleged that the city and its comptroller had been diverting bond proceeds from prior bond offerings for improper, undisclosed uses.

During the investigation, the SEC learned that the city intended to issue new limited obligation bonds, and also that the city had drafted offering documents that made materially misleading statements about the purpose and risks of those bonds, while omitting that past bond proceeds had been misused.

See: SEC Litigation Release.