Michael G Stamenson

The two central figures in the Orange County bankruptcy--who saddled the county with billions of dollars in risky securities--admitted in lengthy depositions released Wednesday that they knew little about municipal finance. In fact, Merrill Lynch super-salesman Michael G. Stamenson, who received daily reports of how much cash was available for investment from the county, told attorneys flatly, "I'm not an expert in municipal finance." And former county Treasurer Robert L.

A top Merrill Lynch trader and other company officials worked behind the scenes during Robert L. Citron's bitter 1994 election to help the embattled treasurer devise campaign tactics and deflect questions about his risky investment practices, new documents suggest.

Merrill Lynch stockbroker Michael G. Stamenson led the way in peddling high-risk investments to former Orange Country Treasurer Robert L. Citron, but he wasn't the only securities salesman who developed close ties to Citron. In fact, in testimony this week before a special state Senate committee investigating the Orange County debacle, Stamenson claimed that a little-known Dean Witter Reynolds salesman named Albert J. De Spirito was the first broker Citron called every day.

The two central figures in the Orange County bankruptcy who saddled the county with billions of dollars in risky securities admitted in lengthy depositions released Wednesday that each knew little about municipal finance. In fact, Merrill Lynch super-salesman Michael G. Stamenson, who received daily reports of how much cash was available for investment from the county, told attorneys flatly, "I'm not an expert in municipal finance." And former county Treasurer- Tax Collector Robert L.

The two central figures in the Orange County bankruptcy who saddled the county with billions of dollars in risky securities admitted in lengthy depositions released Wednesday that each knew little about municipal finance. In fact, Merrill Lynch super-salesman Michael G. Stamenson, who received daily reports of how much cash was available for investment from the county, told attorneys flatly, "I'm not an expert in municipal finance." And former county Treasurer- Tax Collector Robert L.

A top Merrill Lynch trader and other company officials worked behind the scenes during Robert L. Citron's bitter 1994 election to help the embattled treasurer devise campaign tactics and deflect questions about his risky investment practices, new documents suggest.

Orange County will get more than $400 million from Merrill Lynch & Co. to settle the bankruptcy case, but what its citizens may never get is the full story. Detailed in literally millions of records, company documents, internal memos and depositions--what lawyers call the "discovery" in civil cases--is the explanation by executives of Merrill Lynch of their firm's role in America's largest municipal bankruptcy.

One of the central questions surrounding Orange County's bankruptcy is the relationship between then-Treasurer-Tax Collector Robert L. Citron and Merrill Lynch & Co. Did the brokerage firm abuse the county's trust by leading Citron into risky investing? Or was Citron a sophisticated investor, fully aware of what he was doing and where he was going? At the heart of all this is a matter of real importance to municipal investment pools everywhere.

Federal investigators have focused their attention on three brokers at Merrill Lynch, an investment bank that has handled millions of dollars worth of bond transactions for Orange County's troubled investment fund, legal papers served Wednesday indicate. Merrill, the nation's largest brokerage firm, played by far the biggest role in selling derivatives and other exotic financial instruments to the county and extended $2.5 billion in credit to purchase securities.

Merrill Lynch & Co. agreed Monday to pay federal regulators $2 million to settle charges the giant Wall Street firm misled investors as Orange County careened toward bankruptcy. The Securities and Exchange Commission accused Merrill, which had sold volatile securities to the county, of failing to give adequate warning to buyers of the county's municipal bonds about the risks the county treasury was running. The SEC said it was one of the largest settlements of a negligence case in history.

The two central figures in the Orange County bankruptcy--who saddled the county with billions of dollars in risky securities--admitted in lengthy depositions released Wednesday that they knew little about municipal finance. In fact, Merrill Lynch super-salesman Michael G. Stamenson, who received daily reports of how much cash was available for investment from the county, told attorneys flatly, "I'm not an expert in municipal finance." And former county Treasurer Robert L.

Merrill Lynch stockbroker Michael G. Stamenson led the way in peddling high-risk investments to former Orange Country Treasurer Robert L. Citron, but he wasn't the only securities salesman who developed close ties to Citron. In fact, in testimony this week before a special state Senate committee investigating the Orange County debacle, Stamenson claimed that a little-known Dean Witter Reynolds salesman named Albert J. De Spirito was the first broker Citron called every day.

Contending that recently disclosed grand jury testimony exposes massive "fraud and deceit," a state senator said Tuesday that he will move to reopen hearings into Orange County's bankruptcy. Sen. Quentin L. Kopp (I-San Francisco) said testimony before the grand jury and the Securities and Exchange Commission contradicted what Orange County officials and their advisors told a special senate committee early last year during its investigation of the bankruptcy.

More than two years before Orange County's investment pool collapsed, worried Merrill Lynch & Co. officials warned then Treasurer Robert L. Citron that the county's investment holdings were too concentrated in high-risk securities and formed a "SWAT team" to avert disaster, according to a taped conversation made public Thursday. Concern was so great at Merrill Lynch & Co.