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).
