SEC says Harrisburg, Pa., misled bond investors

TO GO WITH THE STORY BY Andrew BEATTY A picture made October 14, 2011 shows the Capitol Building in Pennsylvania's capital Harrisburg. Pennsylvania's state capital has filed for bankruptcy fuelling fears it is the first domino in a chain of municipal defaults, but Harrisburg's fate may have as much to do with politics as finance. AFP PHOTO/Mladen ANTONOV (Photo credit should read MLADEN ANTONOV/AFP/Getty Images) MLADEN ANTONOV

HARRISBURG, Pa. The U.S. Securities and Exchange Commission says Pennsylvania's capital city is agreeing to settle new charges that it provided bond investors with "incomplete or outdated" information about its troubled finances.

The SEC says the charges announced Monday against Harrisburg represent the first time a municipality has been accused of misleading statements that weren't included in securities disclosures.

City attorney Jason Hess says Mayor Linda Thompson is preparing a public statement in response.

The SEC says the city isn't admitting or denying a set of findings in its order. It says the city made misleading statements in a budget report, financial statements and "state of the city" address.

Harrisburg is struggling with a massive debt and having trouble paying its day-to-day bills. The city is currently operating with a state-appointed overseer.

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