“Reckless” and “misleading” are words reported from the judge about a Santee Cooper legal story recently. Stark language, and you can see it online.
That kind of thing catches the eye.
Background: A court ruled that a case involving some Santee Cooper bond holders could proceed; not be dismissed as the company requested.
In the news report, the judge ruled that the bond investors could proceed in the case because of, “sufficiently alleged misstatements or material omissions” … and a “a strong inference” that Santee Cooper “acted recklessly in that the danger of misleading mini-bond purchasers was so obvious that they must have been aware of it.” As noted, take a look at the entire story.
The case is about Santee Cooper mini-bonds and an investor who brought the case. Questions might be summarized as what Santee Cooper knew, when, and investor communications.
Santee Cooper sold more than $100 million in mini-bonds directly to state residents in 2014, 2015 and 2016, says the news story.
Bond Buyer magazine describes the mini-bonds like this: “Santee Cooper has issued mini-bonds in small denominations directly to South Carolina residents for years, with official statements saying that the proceeds were being used to fund capital improvements. … Santee Cooper’s 2014 mini-bond deal was sold in denominations of $200 and $500, according to its official statement.”
The Santee Cooper website now says: “Santee Cooper’s outstanding Mini-Bonds have been called and the program has been closed.”
The request to dismiss the case, which was rejected by the judge, is here.
The larger issue on this is whether this is “more of the same” regarding Santee Cooper.