I just got off the phone with SEC official Kelly Bowers, and he said it’s very unusual for the commission to seek penalties against government officials, as it is doing in the securities fraud charges filed today against five former city of San Diego officials.

He could remember only one other case in which the commission had done so. The decision to seek penalties is, Bowers said, “partly to send a message to other government officials.”

It’s important to note the charges are civil, not criminal. The SEC can also seek an injunction against the individuals, which would essentially put them in contempt of court should they ever commit similar violations of law.

Bowers initially wouldn’t comment on whether the investigation, which has been going on since early 2004, had now concluded. However, he later said this: “I guess at this point our investigation is still continuing.”

ANDREW DONOHUE

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