Thursday, February 29, 2024
Hawai'i Free Press

Current Articles | Archives

Thursday, August 25, 2016
SEC Orders Hawaii to Cease and Desist—State Bond Offerings ‘False and Misleading’
By Andrew Walden @ 9:59 PM :: 5224 Views :: Ethics, Hawaii State Government

SEC Order to Cease and Desist

From US Securities and Exchange Commission August 24, 2016

The violations discussed in this Order were self-reported by Respondent to the Commission pursuant to the Division of Enforcement’s (the “Division”) Municipalities Continuing Disclosure Cooperation Initiative. Accordingly, this Order and Respondent’s Offer are based on information self-reported by the Respondent….

Rule 15c2-12 of the Securities Exchange Act of 1934 (“Exchange Act”) generally prohibits any underwriter from purchasing or selling municipal securities unless it has reasonably determined that the municipal issuer or other obligated person has undertaken in a written agreement to provide annual financial information and, if not included in the annual financial information, audited financial statements when and if available, to the Municipal Securities Rulemaking Board’s (“MSRB”) Electronic Municipal Market Access system (“EMMA”)….

Respondent (State of Hawaii) failed to comply in all material respects with its commitment to provide certain types of continuing disclosure within the timeframes set forth in the continuing disclosure agreements….

In the official statements for the new municipal securities, Respondent made materially false and/or misleading statements about its prior compliance with its earlier continuing disclosure agreements, as follows:

Three negotiated offerings between 2011 and 2013 in which the final official statements read, in relevant part, ‘[t]he State has not failed to comply in any material respect with any of its previous continuing disclosure certificates under [Rule 15c2-12].’ This was false and/or misleading because, although Respondent filed selected portions of the required fiscal year 2009 and 2010 annual financial information for these years, neither audited nor unaudited financial statements were included in these filings. The information missing from these filings was subsequently filed in EMMA 223 and 206 days late, respectively. Respondent failed to file notices of late filings for each of those.

As a result of the conduct described above, Respondent violated Section 17(a)(2) of the Securities Act….

read … SEC Order

Background:

PDF:  SEC Order to State of Hawaii

SEC News Release: SEC Charges 71 Municipal Issuers in Muni Bond Disclosure Initiative “…issuers and obligated persons sold municipal bonds using offering documents that contained materially false statements or omissions about their compliance with continuing disclosure obligations….”

UPDATE: Reaction from Truth in Accounting

Sheila Weinberg of Truth in Accounting was the first to expose the late CAFRs back in 2011.  Contacted August 28 by Hawai'i Free Press, Weinberg points out: 

“To be useful financial reports must be issued in a timely manner. The state's financial reports were so late, especially in 2009 and 2010, that they became almost useless in providing citizens and elected officials with the information needed to make informed decisions.  The SEC is trying to protect bondholders from the state's delinquent financial report. While the state is now issuing its financial report in a more timely manner, who is here to protect the taxpayers?”


Flashback:

Late Reports:

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT