On Wednesday, the SEC announced that it had prevailed in a jury trial against the City of Miami (which it labeled "a recidivist violator of the federal securities laws") and Michael Boudreaux, the city's former Budget Director. Following a two and one-half week trial, the jury took less than four hours to determine that "the City and Boudreaux had committed securities fraud in connection with their disclosures concerning the deteriorating financial condition of the City during 2007 and 2008 and in three separate offerings of municipal securities in 2009." The Miami Herald reports that the jury also found against the SEC and in favor of Boudreaux on one of the counts that alleged fraud under the Securities Act.

In June 2013, the SEC sued the city and Boudreaux alleging that they misrepresented certain interfund transfers in three 2009 bond offerings totaling $153.5 million, and included false and misleading information in the city’s 2007 and 2008 Comprehensive Annual Financial Reports (CAFRs).

SEC Enforcement Director Andrew Ceresney noted that the case represented the SEC's first federal jury trial against a municipality or one of its officers for violations of the federal securities laws.  He added that the agency "will continue to hold municipalities and their officers accountable, including through trials, if they engage in financial fraud or other conduct that violates the federal securities laws."

Following the verdict in this trial, the SEC's trial scorecard in FY 2016 (which ends on September 30, 2016) now includes six trials -- with a record of four outright wins, one loss and one mixed verdict (4-1-1). Although this case appears to be very close to a complete victory for the SEC, I have always defined a "win" in this scorecard as prevailing on all counts. As such, I will count this as a "mixed" verdict. Here is the list as it currently stands:

SEC v. National Note of Utah and Wayne L. Palmer:  VERDICT—FOR SEC (Dec. 2015)

SEC v. Bonan Huang, et al.: VERDICT—FOR SEC (Jan. 2016)

SEC v. Payton: VERDICT—FOR SEC (Feb. 2016)

SEC v. Ferrone, et al.: VERDICT—FOR SEC (April 2016) 

SEC v. Goldstone, et al.: VERDICT—FOR DEFENDANTS (June 2016)

SEC v. City of Miami, Florida and Michael Boudreaux: VERDICT—MIXED (September 2016)

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