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SEC Considering Charges Against Denver Over Airport Bond Issue

May 15, 1996|From Reuters

The Securities and Exchange Commission staff in Denver is close to recommending whether fraud charges should be brought against the city over construction of Denver International Airport, a city official said Tuesday.

City Atty. Daniel Muse said the agency's regional staff had told Denver it is close to making a recommendation to enforcement officials at SEC headquarters in Washington. "They will meet with our people in two weeks to explain where they are," Muse said in a telephone interview.

SEC officials in Denver were unavailable for comment.

Muse reiterated Denver's determination to fight any action the SEC might take.

"We're not settling anything," Muse said when asked about the likelihood of Denver settling any charges.

Muse said SEC staff members had gone overboard in their two-year probe into whether Denver officials adequately informed bondholders about problems with construction of the airport's high-tech baggage handling system.

SEC staff has said the city should have disclosed potential construction delays in documents for $2 billion in municipal bond offerings sold in 1991 and 1992 to finance building the system.

The problems led to a 16-month delay and ballooning costs in opening the $4.9-billion facility.

Muse said the city asked for an opportunity to meet with SEC enforcement officials in Washington if the commission's Denver office recommends that charges be brought.

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