NOW SHOWING IN A SECURITIES MARKET NEAR YOU

DISCLOSURE NIGHT OF THE LIVING DEAD

STARRING  THE LIVING DEAD  The Securities and Exchange Commission (SEC)  THE LIVING  School Districts  Superintendents  Business managers  Underwriters  Financial Advisors  Bond Attorneys  Dissemination Agents

Bond Resolution to Issue Bonds Preliminary Official Statement Price Bonds Final Official Statement Bond Purchase Agreement Issue Bonds Written Undertaking The road to Issuance & Post Issuance

The Living must get to a safe place Official Statement Must be truthful and disclose all material facts Bond Buyer Purchases relying on statements in the OS Post Issuance Disclosure Issuer agrees to provide in written undertaking Secondary Market Bond Buyer Mess Up and the SEC may bite you

Initial Disclosure: Rules  SEC Rule 15C2-12 obligates underwriters to obtain, review and distribute to investors copies of the issuer’s disclosure documents.  Official Statement is Issuer’s Document.  Must be truthful and disclose all material facts. (No omissions of material facts.)

Post Issuance Disclosure – Secondary Market  Underwriters are obligated to get a written undertaking from Issuer.  Issuer agrees to provide (1)annual financial information, audited financial statements with financial and operating data; and (2) material event notices.  Issuers need to provide on annual basis or disclose failure.

THOSE WHO DIDN’T MAKE IT  Orange County – failed to disclose risks relating to investment pools and financial condition ( Financial )  Maricopa County, AZ failed to disclose financial condition and operating cash flow ( Financial )  Syracuse, NY falsely claimed surplus for general and debt service funds ( Financial )  Miami, Florida failed to disclose cash flow shortages ( Financial )  Massachusetts Turnpike Authority failed to disclose substantial cost overruns on “Big Dig” project. ( Financial )

MORE OF THOSE WHO DIDN’T MAKE IT  San Diego, CA failed to disclose looming pension fund crisis. (Pension)  State of New Jersey misleading on public pension funds (Pension)  2013 West Clark Community Schools, Indiana false statement relating to improper gifts and gratuities to school district representatives stated in Official Statement as cost of issuance. (Conflict of interst & graft)

DON’T GET BITTEN  2014 – False and Misleading statements in official statement – originally eight sound stages shrunk to vocational school. (fraud- disclosed a fact they knew was false)  Only mayor and City administrator knew and did not disclose  FIRST TIME CITY OFFICIAL fined $10,000 and life ban from participating in municipal finance (FINED AND BANNED FROM THE LIVING)

SEC ARE NOW BITERS  The SEC will continue to look for opportunities to hold individuals personally accountable for their roles in breaking federal securities laws. The SEC scored a major first when it charged the mayor of Allen Park, Mich., and extracted a financial penalty from him for his role in controlling the city and lower-level personnel who misled investors with false language in offering documents.  "From my perspective, the most effective deterrent is individual liability," Andrew Cerney, director of enforcement said. (Biter)

TOOLS TO STAY OUT OF WAY OF THE LIVING DEAD