The FBI and the Securities and Exchange Commission are investigating the loss of at least $8.4 million in speculative securities investments made by several southern California municipalities, Lawndale officials announced Thursday night.
The involvement of the federal agencies was disclosed at the Lawndale City Council meeting Thursday in a five-page statement prepared by Lawndale City Atty. David J. Aleshire.
Aleshire belongs to the Orange County law firm of Rutan & Tucker, which filed suit in federal court in January on behalf of six cities and municipal agencies against E.F. Hutton, First Investment Securities and six individual brokers. The suit seeks $8.4 million in compensatory damages and $16 million in punitive damages.
Aleshire said that officials from Chino, Lawndale and the Three Valleys Municipal Water District in the San Gabriel Valley have already testified before the SEC. He said officials from Palmdale, San Marino and Maywood are scheduled to testify within the next two months.