Monday, April 7, 2008 | The Securities and Exchange Commission today filed securities fraud charges against five former city of San Diego officials in connection with the city’s financial meltdown, the first action against individuals in its long-running investigation into City Hall.
Federal regulators filed charges in federal court in San Diego against former City Manager Michael Uberuaga, former Auditor and Comptroller Ed Ryan, former Deputy City Manager Patricia Frazier, former Assistant Auditor and Comptroller Teresa Webster and former City Treasurer Mary Vattimo.
The officials are charged with failing to disclose the true depths of the city’s financial problems in statements to investors in 2002 and 2003.
“Despite knowing of the city’s substantial pension and retiree health care liabilities, these five former San Diego officials failed to disclose what they knew to municipal securities investors. Their actions not only jeopardized the investors, but also compromised the interests of the city’s citizens and its current and future retirees,” said Rosalind Tyson, acting director of the SEC’s Los Angeles Regional Office, said in a statement.
The move comes nearly a year and a half after the SEC in a settlement sanctioned the city of San Diego as an entity for securities fraud.
The five charged officials all left the city after its financial crisis hit full-tilt in 2004. In the fallout, the city lost its credit rating and still remains barred from borrowing money on Wall Street. The district attorney and U.S. attorney have each filed criminal charges against pension officials. Webster has been charged in all of those cases; Vattimo was charged in the district attorney’s case.
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