The State : Jury Criticizes San Jose

A brokerage firm involved in San Jose’s $60-million bond trading losses last year may have acted illegally, according to a grand jury report that also cited “incompetence, negligence and stupidity” by city officials. The Santa Clara County Grand Jury said no evidence or testimony was presented to indicate that city employees were involved in criminal activity. However, the jury’s report concluded that “the City Council should have used its powers to request outside advice and information which possibly could have averted the panic and sell-off (of the bonds), which resulted in the loss of $60 million.” The report “questions the propriety of Goldman-Sachs Co. advising the city of San Jose during the period May 18 to May 21,” after potential trading losses were discovered as bond prices were falling.