San Marino : Investment-Loss Testimony
City Manager John Nowak testified Monday before the Securities and Exchange Commission in Los Angeles in the investigation of the loss of $8.4 million by several Southern California cities and agencies that engaged in speculative securities investments.
Nowak said he was the only San Marino official who was called to testify and is not allowed to comment on the private hearing.
Investigations began last month into similar investments by the Three Valleys Municipal Water District, which serves several San Gabriel Valley cities; the cities of Lawndale and Palmdale and the redevelopment agencies of Palmdale and Maywood. The cities and agencies have joined in a lawsuit against E. F. Hutton, First Investment Securities and six individual brokers. The suit, claiming fraud, seeks $8.4 million in compensatory damages and $16 million in punitive damages.
San Marino lost about $2 million last year when Ray Wood, who was then city treasurer, approved investments from San Marino’s $7-million reserve fund in highly speculative bonds, in violation of city regulations.
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