On July 8, 2014, the Securities and Exchange Commission issued its first cease-and-desist order under its Municipalities Continuing Disclosure Cooperation initiative.
Kings Canyon Joint Unified School District stated in a 2010 offering document that it had not failed, in the previous five years, to comply in all material respects with its prior continuing disclosure undertakings, despite the fact that between 2008 and 2010, the District had failed to submit some of the required disclosures. The SEC found that this was an untrue statement of a material fact that the District should have known was untrue. A review of the District’s filings indicates that the required annual financial information and audits were over a year late in some instances, although some of the District’s other filings were late by a shorter period of time. The SEC did not give any guidance on which of the District’s failures it considered to be the basis for the finding that the District’s statement of compliance “in all material respects” was untrue.
