SEC Mulls Civil Charges Against the City of Miami
According to a July 23rd letter from Andre Zamorano, Senior Counsel in the Miami Regional Office of the U.S. Securities and Exchange Commission (“SEC”), SEC investigators intend to recommend that the SEC bring civil charges against the City of Miami for alleged violations of the Securities Acts of 1933 and the Exchange Act of 1934. The letter indicates the SEC would be seeking a civil penalty, the entry of a permanent injunction and the enforcement of a prior cease-and-desist order by the SEC. The City of Miami was given until August 6 to provide a written or videotaped response. The letter was posted on the City of Miami’s website.
The allegations purportedly stem from municipal bond offerings by the City of Miami, Florida in 2007. According to The Miami Herald, the SEC began its investigation of the 2007 bond offerings in 2009 after it was reported that more than $26 million in bond proceeds had been moved from the City’s capital fund to its general fund to pump up the City’s bottom line and create the appearance of a balanced budget. The Miami Herald claims that the funds were shifted just prior to the 2007 bond offering.
A prior cease-and-desist order against the City of Miami was entered in June 2001 by Chief Administrative Law Judge Brenda P. Murray. At that time, Judge Murray concluded that investors in a 1995 bond offering had been misled about the fiscal condition of the City of Miami. Judge Murray found that the City of Miami had violated Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Exchange Act of 1934. In her 2001 order, the City of Miami, Florida was ordered to cease-and-desist from committing any violations or any future violations the Securities and Exchange Acts.
Investors nationwide who have been the victim of financial fraud, may contact the Florida securities arbitration attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to email@example.com.