Former San Diego Officials Settle with SEC on Bond Sale Charges

October 27, 2010 ( - Four former San Diego city officials have reached an agreement with the Securities and Exchange Commission to settle allegations that they misled investors about the city’s pension and retiree health debts in municipal bond sales.

The San Diego Union-Tribune reports that the settlement covers four ex-employees — City Manager Michael Uberuaga, Auditor Ed Ryan, Deputy City Manager of Finance Patricia Frazier and Treasurer Mary Vattimo. In April 2008, the SEC filed civil fraud charges against five city officials for allegedly giving false statements in city bond offerings (see SEC Charges Five Ex-San Diego Officials with Fraud).  

Terri Webster, the city’s former acting auditor, continues to negotiate with the SEC, according to the news report.  

Uberuaga, Ryan and Frazier each agreed to pay $25,000 civil penalties, and Vattimo a $5,000 penalty. The agreement stipulates that the penalty can’t be paid with insurance, reimbursement or indemnification.  

The proposed settlement is awaiting a judge’s approval. The news report said the four former officials do not admit to the wrongdoing outlined in the allegations but agree to resolve the case by saying they misled investors.

In August, the SEC made similar charges against the state of New Jersey (see NJ Hit with Fraud Charges for Pension Funding Disclosure Failures).