The SEC dropped their investigation into the defendants’ municipal debt offering.
Defense counsel retained Cornerstone Research and Professor David Smith of the University of Virginia in an SEC investigation involving a municipal debt offering. The SEC alleged that the offering prospectus had omitted material information.
Two months after the offering, the municipality submitted a late filing notice. Professor Smith performed an event study analysis of the bond’s pricing data. He concluded that there was no evidence that the late filing notice had a negative impact on the price of the bond. Professor Smith’s report was submitted to the SEC as part of a Wells submission.
The SEC decided not to proceed against any of the parties it was investigating.