(HedgeCo.Net)The Securities and Exchange Commission has charged the former controller of a New York-based not-for-profit college with defrauding municipal securities investors by fraudulently concealing the college\u2019s deteriorating finances.<\/p>\n
According to the SEC\u2019s complaint, in recent years, the College of New Rochelle came under considerable financial stress because of declining student enrollment and plummeting revenue from tuition. To hide the college\u2019s deteriorating financial condition from investors, the college\u2019s former controller, Keith Borge, created false financial records, didn\u2019t file payroll tax submissions, and didn\u2019t assess the collectability of pledged donations that were increasingly unlikely to be received as donors became more frustrated with the college\u2019s operations. Borge\u2019s misconduct resulted in the college\u2019s financial statements for its 2015 fiscal year falsely overstating net assets by almost $34 million. Borge also falsely certified the accuracy of the college\u2019s financial statements. The financial statements were published by Borge to an online repository in connection with the College\u2019s continuing disclosure obligations stemming from a 1999 bond issuance, and significantly influenced investors\u2019 decisions to invest in the bonds.<\/p>\n
\u201cFinancial difficulties are no excuse for engaging in accounting misconduct and concealing critical information from investors,\u201d said LeeAnn Ghazil Gaunt, Chief of the SEC Enforcement Division\u2019s Public Finance Abuse Unit.<\/p>\n
\u201cMunicipal bond investors, including those in the secondary market, depend on the accuracy of financial statements, and the SEC will hold accountable those who take steps to mislead the investing public,\u201d said Marc P. Berger, Director of SEC\u2019s New York Regional Office.<\/p>\n
The SEC\u2019s complaint, filed in federal district court in Manhattan, charges Borge with violating, and aiding and abetting violations of, the antifraud provisions of the federal securities laws. Borge agreed to a partial settlement that would permanently enjoin him from future misconduct, with potential monetary sanctions to be determined at a later date. The partial settlement is subject to court approval.<\/p>\n
In a parallel action, the U.S. Attorney\u2019s Office for the Southern District of New York today announced criminal charges against Borge. Borge has pleaded guilty to those charges.<\/p>\n
The SEC did not charge the College of New Rochelle after considering the institution\u2019s extensive cooperation and remediation. After discovering Borge\u2019s actions and conducting a preliminary review, the college publicly reported the financial issues, promptly engaged outside expertise to conduct a full internal investigation, and issued restated financial results. The college also promptly and extensively cooperated with the SEC in its investigation and proactively undertook wide-reaching remedial measures to enhance its internal controls and governance.<\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net)The Securities and Exchange Commission has charged the former controller of a New York-based not-for-profit college with defrauding municipal securities investors by fraudulently concealing the college\u2019s deteriorating finances. According to the SEC\u2019s complaint, in recent years, the College of New […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-68654","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/68654","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=68654"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/68654\/revisions"}],"predecessor-version":[{"id":68655,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/68654\/revisions\/68655"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=68654"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=68654"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=68654"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}