OT - SEC (not that SEC) proceeding against OSU

Submitted by A Real Toe Tapper on

The SEC (not that SEC) issued a press release yesterday announcing charges brought against 71 municipal bond issuers for violations of Section 17(a)(2) of the Securities Act of 1933.  One of those issuers is The Ohio State University.  It is a settled administrative proceeding (part of a much larger sweep / cooperation program).  So it is not something that will go into litigation, and it looks like OSU is walking away without having to pay a fine.  

While this is a pretty mild offense as far as securities law violations go, it is now technically true to say that the SEC has charged OSU with violating the federal securities laws by making materially false statements to investors.  

https://www.sec.gov/news/pressrelease/2016-166.html

leftrare

August 25th, 2016 at 5:51 PM ^

is a bitch, man.  The violation is that they said they were in compliance but in fact they weren't because they filed disclosures a month or two late for four or five years in a row.  The kicker is tOSU "self-reported" the violation.  So, again we see that the football team informs the rest of the school on code of conduct. 

Youcrytomuch

August 26th, 2016 at 1:51 AM ^

On actually beating them on the field. After we do that, we can say anything we want without sounding like a crybaby who just got its ass beat. Which is sort of what this sounds like....

VinegarStrokes

August 25th, 2016 at 5:55 PM ^

wonder what the yield was at issuance. this day and age, it's nearly impossible to find a muni with a moderate duration and a 3-4% yield unless grandma and grandpa die and their kids sell their inventory.

njsteve

August 25th, 2016 at 6:21 PM ^

The price at issuance was 98.993, so the yield was actually a bit higher. It's federally taxable, too, for what it's worth. The most unusual thing about it is that it's a 100-year bond: maturing 6/1/2111.

ElBictors

August 25th, 2016 at 7:52 PM ^

4.85 net spendable and state tax-free isn't bad in this yield environment. 

But what is the debt-financing paid on?  100yr callable bond based on having a century to offset coupon payments with AD revenue?

Or are the bonds being floated for a speicific project?

[edit] - looks like osu made a materially false statement in 2011 representing that it had reported in a timely manner in the past, but in fact was lying -

(Sorry, didn't see leftrare's reply before posting the same)

A 2011 negotiated offering in which the final official state
ment read, in relevant
part: “[t]he University is currently in compliance and has been in compliance for
the past 5 years with all prior continuing disclosure agreements to which it is a
party.” This statement was false because Respondent filed its audit
ed financial
reports for fiscal years 2006, 2007, 2009, and 2010 late by two months, two
months, a month, and nine months, respectively, and failed to file timely certain
operating data for fiscal years 2008 through 2010. Respondent also failed to file
ti
mely notices of late filings for each of those.
9.

Respondent knew or should have known that this statement was untrue

mi93

August 25th, 2016 at 9:27 PM ^

Spectacular topic...

So since the SEC (NTSEC) is involved, what's the strike price for November 30, 2016 wins column total for Michigan, and at that strike, are you buying puts or calls?




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