A Chicago charter school operator was charged last week in federal court with defrauding investors in a $37.5 million bond offering for school construction, according to the Securities and Exchange Commission, which filed the complaint.
The SEC alleges that the UNO Charter School Network Inc. and United Neighborhood Organization of Chicago, which now operate a network of 16 charter schools serving more than 7,500 students, “not only failed to disclose a multimillion-dollar contract with a windows company owned by the brother of one of its senior officers, but investors also weren’t informed about the potential financial impact the conflicted transaction had on its ability to repay the bonds.”
The SEC said the organizations are settling the charges by agreeing “to undertakings to improve [their] internal procedures and training, including the appointment of an independent monitor.” Meanwhile, the investigation is continuing.
