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updated: 6/2/2014 4:25 PM

SEC says Chicago school operator defrauded investors

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Associated Press

The Securities and Exchange Commission has charged a Chicago charter school operator with defrauding investors.

The SEC announced the charges Monday against UNO Charter School Network Inc. The SEC alleges the school operator and United Neighborhood Organization of Chicago failed to disclose a multimillion-dollar contract with a windows company owned by the brother of one of its senior officers. The SEC alleges investors in a $37.5 million bond offering for school construction weren't informed about the transaction's potential financial impact.

UNO is settling the charges by agreeing to improve its procedures and by appointing an independent monitor.

Miguel d'Escoto left UNO in February after the Chicago Sun-Times reported that $8.5 million had gone to companies owned by his relatives.

A phone message seeking comment from UNO wasn't immediately returned.

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