Bellflower : E.F. Hutton Told to Return $103,000 of Investment Loss
Arbitrators hired by the New York Stock Exchange have ruled that E. F. Hutton misled Bellflower city officials when it advised them to invest city money in high-risk bonds, and ordered the company to return about $103,000 in investment losses, city officials said.
City Atty. Maurice O’Shea said in 1987 the brokerage house invested $191,573 in bonds that did not assure a safe return and were instead speculative and “unsuitable investments for a city.” The money, O’Shea said, was lost.
E. F. Hutton at first refunded $77,000, O’Shea said, but refused to pay the balance of the investment, arguing that the city was aware of the risk. In response, the city filed suit, O’Shea said. Arbitrators ruled in Bellflower’s favor last Thursday, allowing the city to recover all but $11,000 of its investment.
“We relied on their expertise and we were just totally misled,” O’Shea said.
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