SEC’s School District Enforcement Action

Hawkins Advisory

This issue of the Hawkins Advisory analyzes the SEC enforcement actions of July 29 relating to an Indiana school district and related violations of Rule 10-5 and Rule 15c2-12.

On July 29, 2013, the Securities and Exchange Commission (the “SEC”), in an administrative proceeding,1 accepted a settlement offer made by City Securities Corporation (the “Underwriter”) and imposed a cease‐and‐desist order. The SEC found that the Underwriter committed numerous violations of the federal securities laws. Concurrently, the SEC in administrative proceedings imposed cease‐and‐desist orders on (i) the supervisor (the “Supervisor”) of the Underwriter’s public finance department and (ii) the issuer (and obligated person),2 West Clark Community Schools, Indiana (the “School District”), whose misleading disclosures were the basis for the enforcement actions (“Order” or “Orders,” as the context indicates3).

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