Sidley Austin Update – SEC Find Local Government Violated Anti-Fraud Securities Laws – In a First, SEC Finds a Local Government Violated the Anti-Fraud Provisions of the Federal Securities Laws by Recklessly Making Materially False and Misleading Written and Verbal Statements Not Directly Connected with the Issuance of Debt Securities

On May 6, 2013, the Securities and Exchange Commission (the “Commission”) ordered the City of Harrisburg, Pennsylvania, to cease and desist from committing violations (current and future) of the anti-fraud provisions of the federal securities laws, marking the first time that the Commission has charged a municipality for such violations and putting public officials (both elected and appointed) on notice that their statements, both written and oral, are part of the total mix of information on which investors may, depending on the circumstance, rely when deciding to purchase a municipality’s securities and holding the municipality potentially liable under those laws for materially misleading statements and omissions made recklessly by such officials.

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