Stefanik Calls On SEC to Investigate Harvard’s $750 Million Bond Disclosure

Updated June 18, 2025, at 3:23 p.m.

Rep. Elise M. Stefanik ’06 (R-N.Y.) urged the United States Securities and Exchange Commission on Tuesday to investigate Harvard’s bond sales, accusing her alma mater of withholding key financial information amid tensions with the federal government.

In a letter addressed to SEC Chairman Paul S. Atkins, Stefanik alleged that Harvard failed to disclose its decision to reject federal demands before issuing $750 million in taxable bonds on April 9. The University made that decision public on April 14 and formally disclosed it to investors in a supplemental filing the following day — nearly a week after the offering.

It is not clear that Harvard had already made the decision to reject the demands before it issued the bonds.

“There is reason to believe Harvard withheld material information from bondholders,” wrote Stefanik, who chairs the House’s Republican caucus. “If Harvard had indeed made its decision by April 9 and did not disclose it, this would warrant serious scrutiny.”

Stefanik claimed that the omission may have violated federal securities laws, arguing that investors were not made aware of the full financial and reputational risks posed by Harvard’s growing conflict with the Trump administration.

In essence, she argued, Harvard should have told bondholders to expect the Trump administration to punish its bottom line for refusing to comply with federal demands.

A University spokesperson forcefully rejected Stefanik’s allegations, writing that Harvard could not have foreseen the administration’s sweeping demands nor its retaliation, and that it communicated with bondholders as soon as possible.

Stefanik’s letter outlined a timeline beginning on March 31, when the White House announced that it would review nearly $9 billion in federal funding flowing to Harvard and its affiliates. The administration sent an initial letter on April 3 laying out preliminary conditions for continued funding — including governance reforms and changes to hiring and admissions practices.

Harvard’s April 9 bond memorandum acknowledged that federal scrutiny was already underway. The document warned of possible consequences, including reduced research funding and threats to its tax-exempt status, and cited both the March 31 announcement and the April 3 letter. At the time, Harvard also noted uncertainty surrounding the $1.6 billion it expected to receive in active federal contracts and grants.

But on April 11, two days after the bond sale, the Trump administration issued a more aggressive set of demands, including new requests to derecognize pro-Palestine student groups and audit academic programs for ideological bias.

Harvard formally rejected those terms on April 14. University officials have since maintained that the April 11 letter — not the April 3 one — prompted their decision to walk away from negotiations with the White House and later pursue legal action.

In the supplementary filing the day after, Harvard informed investors of its rejection and warned that legal proceedings were likely. It filed a lawsuit against the White House just days later, challenging both the demands and a $2.2 billion funding cut.

Stefanik argued that the failure to disclose the University’s defiance in the April 9 prospectus deprived investors of critical information about the financial and reputational risks associated with the federal standoff.

“Investors were asked to analyze risk without knowing the full extent of Harvard’s exposure to reputational and funding related fallout from a conflict with the federal government,” she wrote.

“Such a failure would represent a material omission under federal securities law,” Stefanik added.

Harvard spokesperson Sarah E. Kennedy O’Reilly wrote in a statement that when Harvard initiated the bond sale on April 9, it could not foretell the “additional, unlawful conditions outlined in the government’s April 11 letter, much less the government’s freeze of grants and contracts to April 14.”

“This is why, on April 15, Harvard issued supplemental information to bondholders,” she added.

A spokesperson for the SEC did not respond to a request for comment. The SEC has not publicly announced an investigation.

Stefanik also questioned the strength of Harvard’s overall financial position. Despite its $53 billion endowment, she pointed to the University’s reliance on illiquid investments — including private equity, real estate, and venture capital — which she wrote are often valued using outdated internal estimates.

“In today’s environment of elevated interest rates and declining private market valuations, the real, realizable value of these assets is likely far below stated values,” she wrote. “Moreover, much of this portfolio is leveraged, compounding potential losses in a downturn.”

Harvard has maintained the highest bond ratings granted by leading rating agencies, securing triple-A rankings from both Moody’s and S&P, for more than a decade.

The University has issued more than $1.2 billion in taxable bonds over the past two months, according to the letter, adding to $7.9 billion in existing debt. Stefanik argued that Harvard’s recent borrowing raised questions about its short- and medium-term liquidity.

Harvard announced in April that it was planning to sell nearly $1 billion of private equity fund stakes, a move that several other institutions, including Yale University, have followed.

Stefanik’s Tuesday letter marks the latest effort by Republican lawmakers and Trump administration officials to pressure Harvard on multiple fronts — and bring it to its knees. Raining down investigations and penalties at a blistering pace, Harvard’s critics in Washington have targeted its international students, federal funding, endowment returns, and tax-exempt status.

They have accused Harvard of fostering antisemitism, being influenced by foreign actors, and discriminating against white applicants and affiliates. And they have demanded everything from audits of Harvard’s academic programs to video footage of international students at protests.

Stefanik, in particular, has emerged as one of the most aggressive anti-Harvard voices. Since April, she has spearheaded or joined efforts to investigate alleged civil rights violations on campus, ties to Chinese government-linked entities, and discrimination in faculty hiring.

If the SEC finds Harvard violated federal securities law, the University could face fines, lawsuits from investors, and additional restrictions on future borrowing. It remains unclear whether the SEC will act on Stefanik’s request. If the agency opens an inquiry, the review process could extend for months.

—Staff writer Dhruv T. Patel can be reached at dhruv.patel@thecrimson.com. Follow him on X @dhruvtkpatel.

—Staff writer Grace E. Yoon can be reached at grace.yoon@thecrimson.com. Follow her on X @graceunkyoon.