SEC Reported Probing City of Bell Bond Sales

October 20, 2010 ( – Federal securities regulators are investigating bonds issued by the city of Bell, California, which has been caught up in a public pay and pensions scandal, an unnamed source told Reuters.

According to Reuters, the U.S. Securities and Exchange Commission (SEC) has sent out subpoenas involving the City of Bell, the individual said.

Reuters said other agencies are also looking into the finances of Bell, which has become the subject of scrutiny in recent months following media accounts of the large salaries of some of its top officials — including the nearly $800,000 salary of its former city manager (see CalPERS Places Hold on Pensions of City of Bell Members).

According to Reuters, the Los Angeles County district attorney has brought public corruption charges against Bell’s former city manager and seven other city officials, while California’s state securities regulator also has an investigation into Bell under way.

Last month, Fitch Ratings cut and then withdrew its ratings on $57.5 million of outstanding bonds issued by Bell.

In August, the SEC brought securities fraud charges against the state of New Jersey over bond sells (see NJ Hit with Fraud Charges for Pension Funding Disclosure Failures).