Districts to see $30.4 million from investment firm charged by SEC
An investment firm charged with selling unsuitably risky investments to five Wisconsin school districts has agreed to settle the charges and pay $30.4 million, which will be distributed to the districts, U.S. securities regulators said today.
The Securities and Exchange Commission charged RBC Capital Markets LLC with misconduct in the sale of unsuitable investments to the Waukesha, Whitefish Bay, West Allis-West Milwaukee, Kenosha and Kimberly school districts, and for inadequate disclosures about the risks of those investments, according to a news release.
RBC marketed and sold to trusts created by the districts $200 million worth of risky investments, for which the districts contributed $37.3 million of their own funds and borrowed the rest. The districts made the investments to help fund post-retirement benefits, which they had promised to employees.
"It's a great day for these five districts," said Stephen Kravit, an attorney representing the districts. He added that they had been vindicated in fraud, and that a significant portion of their losses would be paid immediately by RBC.
Districts can expect to receive their share of the money, distributed by the SEC through a formula, within 10 days.
The SEC also has also charged a St. Louis-based financial firm, Stifel, Nicolaus & Co., with fraud in connection with the same sale. That case is still pending.
The districts also have civil lawsuits pending against both financial firms, Kravit said.
- Interest rates dropping July 1 for new federal student loans
- Marquette names new VP for student affairs from Washington College
- New online site connects families with summer fun, learning opportunities
- UW-Eau Claire faculty passes no-confidence resolution in split vote
- UW-La Crosse Chancellor staying in Wisconsin
- Another state university system grapples with dividing budget cuts among campuses
- UW Colleges, UW-Parkside pass resolutions of no confidence in UW System leadership
- What happened at UW-Eau Claire on Tuesday?
- UW-Eau Claire student leader calls proposed no-confidence vote 'embarrassingly naive'
- Two Marquette seniors from Milwaukee area land presitgious Fulbright awards
More Education Coverage
- Cedarburg High School principal named Grafton superintendent
- Former HOPE Christian coach, dean convicted of sexual assault
- ‘Horrible’ curriculum dooms program putting cops in classes (36)
- Alan J. Borsuk: MKE Fellows advances first class of promising future leaders (1)
- UW-Madison practices in line with Supreme Court ruling
Parents, don't wait till summer ends to get your kids ready for school. Use this interactive, printable checklist to prepare.