SEC cites Fulton over bad bond information

County is one of 71 local government units in U.S. getting sanctions.

Fulton County is among 71 local governments across the nation that the federal Securities and Exchange Commission sanctioned for failing to issue timely updates on their financial condition to investors in their bonds.

The violations occurred several years ago and the county has settled by agreeing to update its disclosures and follow rules in the future.

Government units that sell municipal bonds are required to file financial reports every year, and whenever a significant change in their financial condition occurs. But in 45 states, the SEC said Wednesday, 71 government units and non-profits such as colleges and hospitals that issue bonds through local governments failed to update their reports.

The local governments and non-profits then issued new bonds while falsely claiming that their financial disclosures were up to date, the SEC said. Such “material misstatements and omissions” deprived investors of timely information, the agency said.

The SEC said it offered “favorable settlement terms” to the bond issuers because they self-reported the alleged violations.

Under its settlement, Fulton didn’t admit or deny the allegations but agreed to disclose the sanction in future filings for five years. The county said in a statement that it voluntarily participated in an SEC self-reporting program in 2014 and “has already taken steps toward fully complying” with disclosure rules. It’s also added training and other steps, it said.

The SEC said the county made misleading statements when it issued bonds in 2011. The SEC said Fulton claimed in bond documents it had complied with disclosure requirements, other than missing a 2009 deadline to file its annual financial report. In fact, the SEC said, the county missed disclosure deadlines in three of four years from 2006 to 2009 and “knew or should have known that this statement was untrue.”