Reuters: Regulatory News: US regulators say Miami misled bond buyers

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US regulators say Miami misled bond buyers Jul 24th 2012, 20:31 MIAMI, July 24 | Tue Jul 24, 2012 4:31pm EDT MIAMI, July 24 (Reuters) - Miami officials misled investors about the city's fiscal health during tax-free bond sales carried out during the worst of the housing bust that ravaged local government finances in Florida, U.S. regulators have determined. In a three-paragraph letter, the Miami office of the U.S. Securities and Exchange Commission told the city on Monday its staff would recommend to top SEC officials that civil action such as fines or injunctions be taken against the city. The SEC said the city had until Aug. 6 to submit testimony and arguments against the civil actions to be recommended by staff investigators to the commission's top officials. "The city respectfully disagrees and looks forward to continuing a dialogue with the SEC that will hopefully show these charges are not warranted," Ivan Harris, a lawyer representing Miami in the inquiry, said on Tuesday. SEC officials declined to comment on the matter. In March the city said its lawyers were in talks to settle possible civil violations connected to a $65 million bond sale. The SEC began an inquiry in 2009 that centered on suspicions Miami officials had misled investors about the city's finances during a 2009 bond sale, according to the Miami Herald newspaper. The newspaper reported that Miami officials had shifted $26.4 million from the city's capital account to its general fund. The transfer eased a budget deficit and hid the effects of sharply rising staff costs that may have dissuaded some investors from buying Miami's debt. Link this Share this Digg this Email Reprints

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