The SEC Charged Miami With Fraud For Playing Financial “Shell Games”

Miami. A beautiful city, but also many other things. A city of class. A city where people casually eat other people's faces. And now, it's also the first city to be charged with fraud by the SEC.

The SEC (which has really been on a roll lately) is accusing the city where the heat is on and its former budget director of transferring money from a capital improvement fund into a general fund to hide its deficits.

The SEC further alleges that Miami then used that account to pretend it had more reserves than it did in an effort to gain better terms on a series of bond offerings.

The city has retained Morgan, Lewis & Bockius for its defense, and the firm's attorneys are calling the charges unwarranted, saying they were brought merely because the statute of limitations is almost up.

Miami is also charged with violating a 2003 cease-and-desist order for similar conduct, and in May the SEC charged South Miami with misleading investors about the tax-exempt eligibility of a development.

[WSJ, image via Shutterstock]