Drought + Water District + Bonds = SEC Fine

Why did a water district get fined by the SEC? A California water district saw declining revenue in the drought that led to shifting expenses to the incoming revenue side of the ledger.  

Why did the water district shift expenses to income? The accouting gimick needed to show that the water district had sufficient revenue to cover the bond debt payments. Thereby misleading investors.

Could a state agency fine a water district’s investment pitch? Yes. State agencies have regulatory authority over investments. 

Governing | California’s Largest Water District Settles With SEC Over ‘Enron Accounting’

Sacramento Bee | Major Valley water district settles with SEC