The Securities and Exchange Commission is seeking an emergency restraining order to prevent a Chicago suburb from selling bonds this month, alleging in court documents filed on Tuesday that the city and its comptroller misused bond proceeds and schemed to defraud investors. In a complaint filed against the town of Harvey, Illinois, and the comptroller, Joseph Letke, in the U.S. District Court for the Northern District of Illinois, the SEC also demanded a jury trial, an unusual request in the SEC's current crackdown on the $3.7 trillion municipal bond market. Harvey is "exploring a new issuance of bonds as soon as late June 2014," the SEC said. "Through a pattern of egregious misuse of bond proceeds, Harvey has demonstrated that it cannot be trusted," the SEC said in the restraining order request. By law, the city does not have to inform federal regulators of planned sales. The commission is seeking to freeze Letke's assets and ban him from bond issuance as well as to bar
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