In a rare regulatory sanction against a hospital, the Securities and Exchange Commission has charged the governing body of Jackson Health in Florida of misleading investors in connection with a 2009 bond sale, the Miami Herald reported.
According to the SEC, the Public Health Trust, which governs Jackson Health, relied on bad financial information from hospital management in connection with the 2009 sale of $83.3 million of bonds for capital improvements.
The Herald reported that Jackson Health had projected a $56 million loss at the time it issued the bonds. The actual loss was $244 million. The system has been under financial pressure for years, and has resorted to drastic measures, such as furloughing employees.
"The Public Health Trust fell short in its obligation to maintain adequate accounting systems and controls that ensure truthful disclosures to investors about its financial condition," said Eric I. Bustillo, director of SEC's Miami Regional Office, in a statement. "The Public Health Trust used stale numbers to calculate its revenue figures and lacked any reasonable basis for projecting losses that were far less than reality."
However, the SEC did not fine Jackson Health, instead securing a promise it would not engage in fraudulent activities tied to future bond issues. SEC officials noted that Jackson Health had overhauled its governance and finances over the last four years.
According to the Herald, the SEC sanctions come just before Miami's Dade County voters go to the polls to decide whether to increase a parcel tax to pay for $830 million in improvements to Jackson Health's infrastructure.