November 5, 2013 / 5:25 PM / in 4 years

US regulators slap municipal issuer with $20k penalty

WASHINGTON, Nov 5 (Reuters) - A special district in Washington state settled Securities and Exchange Commission charges of misleading bond buyers by paying a $20,000 fee, the first time the federal regulators have assessed a financial penalty against a municipal issuer, the SEC said on Tuesday.

The Greater Wenatchee Regional Events Center Public Facilities District also agreed to undertake remedial actions after it failed to make key disclosures in the official statement for bond anticipation notes sold in 2008, including an independent consultant’s questions about the economic viability of the project being financed, the SEC said.

In December 2011, the district defaulted on the $41.77 million of debt used to finance a new hockey arena and events center.

Underwriter Piper Jaffray & Co., also agreed to pay a penalty, of $300,000, and to review its policies and procedures on municipal underwriting. Meanwhile, lead investment banker Jane Towery settled related charges by agreeing to pay a $25,000 fine. Developer Global Entertainment and its former president Richard Kozuback will also pay $10,000 each, the SEC said.

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