YORK, Maine — The federal Securities and Exchange Commission has censured the town of York for failing to properly disclose information to investors about municipal bond sales in 2006-2008, but has agreed to a settlement that does not fine the town for its compliance failure.
The SEC said the town had failed to comply with federal law as set out in its Municipal Continuing Disclosure Cooperation Initiative. The town is a participant in the MCDC.
The MCDC is “intended to help municipalities and underwriters address disclosure delinquencies by encouraging self-disclosure,” said Town Manager Steve Burns. The town did cooperate with the SEC by admitting to the violations, which played a role in the SEC’s subsequent offer to settle the matter.
In its Offer of Settlement to the town, the SEC said that the town filed audited financial statements in connection with municipal bond sales 1,337 days late in 2006; 859 days late in 2007; and 456 days late in 2008. However, in a later bond offering the town did not disclose that it had filed the statements late.
Moreover, the SEC charges, the town also “failed to file the required notices of late filings” for each of those years.
The Board of Selectmen Monday night authorized Burns to enter into the settlement agreement with the SEC. Burns agrees that the town was to blame for not following federal law, saying York, “like many other towns, was among those municipalities that did not always make and file its continuing disclosures in a timely manner.”
Under the terms of the agreement, the town agrees to establish written policies to make sure this situation does not reoccur and to train staff about disclosure obligations. The town has to also “disclose in a clear and conspicuous fashion the terms of this settlement in any final official statement” for a bond sale for the next five years. The town also has to certify in writing that it has complied with the requirements.
In exchange, said Burns, “the town will not have to pay any monetary fine or penalty.”
Burns said this SEC settlement does not affect the town’s bond rating.