SEC Settles With Ethiopia's Electric Utility Over Unregistered Bonds

Investing

Published: June 9, 2016 10:10 am

Last Updated: January 13, 2020 7:01 am

The U.S. Securities and Exchange Commission (SEC) recently announced that Ethiopia’s electric utility has agreed to pay nearly $6.5 million to settle charges that it violated U.S. securities laws by failing to register bonds it offered and sold to U.S. residents of Ethiopian descent.

According to the SEC’s order instituting a settled administrative proceeding, the Ethiopian Electric Power (EEP) conducted the unregistered bond offering in order to help finance the construction of a hydroelectric dam on the Abay River in Ethiopia.

On the stateside, the EEP held a series of public road shows in major cities across the United States and marketed the bonds on the website of the U.S. Embassy of Ethiopia, as well as through radio and television advertising targeted at Ethiopians living in the United States.

The electric utility raised roughly $5.8 million from more than 3,100 U.S. residents between the years of 2011 to 2014 without ever registering the bond offering with the SEC.

Stephen L. Cohen, associate director of the SEC’s Division of Enforcement, commented on the report:

Foreign governments are welcome to raise money in the U.S. capital markets so long as they comply with the federal securities laws, including registration provisions designed to ensure that investors receive important information about prospective investments. This settlement ensures that investors get all of their money back plus interest.