by Christopher Freeburn | July 22, 2013 12:04 pm
Federal regulators say that Florida’s second largest city lied to investors in order to obtain better financing agreements.
The city of Miami and its former budget director have been slapped with securities fraud charges by the Securities and Exchange Commission (SEC). The government claims that financial reports issued in 2007 and 2008 contained false information designed to conceal its growing budget deficit, the Wall Street Journal notes.
Michael Boudreaux, Miami’s budget director at the time, “masterminded” the illicit transfer of money between two city funds in order to artificially boost the city’s apparent financial condition and deceive investors, according to government allegations.
The SEC claims Boudreaux and the city acted to raise Miami’s credit rating so that it could negotiated more favorable terms for a $153 million bond offering.
Miami has denied the charges. An attorney for the city called the SEC action “unwarranted.”
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