In a move that may be standard operating procedure, the Security and Exchanges Commission has opened an informal inquiry into the city’s Chapter 9 bankruptcy. In a letter, the federal agency requested that the city preserve all records relating to their bond debt.
The SEC is the latest government agency to increase their scrutiny of the nearly insolvent Southern California city. The State Department of Finance and the US Department of Housing and Urban Development have also launched their own audits. According to the City’s attorney, they hope more agencies will request access to the City’s books.
The SEC has jurisdiction of not only bond debt, but how revenues from those debt sales were spent. The city has borrowed from reserve funds to help subsidize the general funds and had failed to repay the debts.
San Bernardino, Stockton, and Victorville are all being at least informally investigated by the SEC.
Read the full story at the Los Angeles Times.