Bellflower : Investment Loss Negotiated
City Atty. Maurice O’Shea said he has been meeting with attorneys for E.F. Hutton in an effort to recover $290,000 that Bellflower lost in a speculative investment deal, but that an agreement has not been reached.
“We are very close,” O’Shea told the City Council on Monday night. “But at this time there is nothing to report.”
City officials say they were misled by an account representative with the investment firm who made an unauthorized purchase of government bonds on margin, or with borrowed money, apparently violating state law and the city’s own investment policy.
Steve Nelson, a spokesman for E.F. Hutton’s headquarters in New York, said the firm is not responsible and attributed the loss to a big drop in the fixed-income securities market in 1987.
If an agreement is not reached, O’Shea said the city will consider legal action against the firm.
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