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The Securities and Exchange Commission announced today that it filed charges against the accounting company and accountant that handled the city of San Diego’s financial reporting at a time when the municipal government downplayed its pension and retiree health care challenges to investors.

The SEC alleges the firm of Calderon, Jaham & Osborn and its owner, Thomas Saiz, failed to comply with generally accepted accounting principles by failing to ensure that the city of San Diego disclosed the true health of its pension and retiree health care funds. Both funds have suffered billion-dollar deficits throughout much of the decade, but their troubles were downplayed on reports that accompanied five bond offerings that the city issued between 2002 and 2003.

Saiz agreed to pay a $15,000 fine, according to an SEC press release.

The action comes more than a year after the city of San Diego settled with the SEC for issuing bonds with the faulty information. The city was not fined, but it was forced to hire a monitor to oversee the city’s efforts to reform its financial reporting systems. Individual city officials have not been charged.

You can read the SEC’s charges against Saiz and Calderon here. Check back for more on this later.


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