Judge Releases Most of Wymer Funds : Securities: Authorities account for $760 million managed by the investment adviser. Orange and other cities have lost $45 million.

A federal judge Friday lifted a freeze on most of the money remaining in accounts managed by Newport Beach investment adviser Steven D. Wymer, who has been charged by federal authorities with securities fraud.

Receiver Robert E. Carlson reported that at least $760 million in 76 accounts appear to be mostly intact, and U.S. District Judge Richard A. Gadbois Jr. authorized release of the funds. But officials offered little hope that they would recover more than $100 million that is allegedly missing or misappropriated.

The court’s order came as a relief to some investors, including cities, schools, libraries, pension funds, banks and thrifts in 13 states and Micronesia. Some public agencies were having trouble meeting payrolls without the cash they had entrusted to Wymer’s Irvine companies, Institutional Treasury Inc. and Denman & Co., to invest in U.S. government securities.

Gadbois’ order does not affect the freeze on client accounts that appear to have been tampered with, or on Wymer’s personal assets. Federal prosecutors have said Wymer earned $4 million this year and had a net worth of $20 million.

Ten California cities, including Torrance and Orange, and a California utility appear to have lost nearly $45 million, according to Carlson’s report.

“The problem is that he created unauthorized accounts, and the city was unaware that these accounts existed,” said Michael B. Jeffers, attorney for Orange, which appears to have lost $7.1 million. Jeffers said Wymer had reported to clients both fake trades and profits that never existed.

Meanwhile, Wymer’s attorney said Friday that he will appeal a federal magistrate’s decision not to grant Wymer bail. Wymer is charged with both civil and criminal securities fraud and faces a minimum 10-year jail sentence. He denies any wrongdoing.

Carlson’s report was the first public accounting of Wymer’s finances. But with estimates of money missing, money traced and money recovered changing daily, both investors and investigators are still trying to unravel numerous complex financial questions. Among them:

* Wymer’s attorneys say Wymer had up to $1.5 billion under management, though in his latest statement to the Securities and Exchange Commission, he claimed to manage $1.2 billion. Carlson’s initial reckoning covered only about two-thirds of that sum.

* At least $21 million in money allegedly misappropriated from Iowa Trust accounts, an investment pool for Iowa cities, was traced to Shearson Lehman Bros. in New York. The funds were in accounts of four California entities. In the first of what could be an avalanche of litigation, the brokerage filed papers in New York Thursday to “seek guidance from the court” of who is entitled to the funds, a Shearson spokeswoman said.

* Carlson’s team of investigators, lawyers and accountants uncovered Wymer or ITM bank accounts that seem to be fictitious and accounts in the names of various ITM clients that the clients never knew existed. “These accounts currently have small or zero balances,” the report said. “We have not yet determined their purpose or past activities.”

* The city of La Quinta said its losses were about $11 million lower than indicated by the report. ITM records show that La Quinta had $14.2 million invested on Oct. 31, and records at Refco Securities in New York indicate that it had $101,000 instead. But La Quinta accounting supervisor John Risley said the city withdrew all but about $3 million in early December.

“This is still a substantial loss for us if we’re not able to get that,” Risley said. “I’m confident that we’re going to get the majority of that, though.”

But other cities were licking their wounds. Big Bear Lake was told that it had $247 left from a $2.48-million investment, a loss of 19% of the city’s investment portfolio, city Treasurer Jeffrey D. Brunsdon said. Although there will be no immediate cash crunch, Brunsdon said, “it does cast a pall over the long-range capital outlook of the city.

“We wanted them to invest the funds in short-term Treasury bills, that’s all,” Brunsdon said. “Anything outside of those instructions were not permitted by us.”

Carlson, who indicated the possibility that Wymer’s companies may have to be declared bankrupt, will continue his work as receiver until a new hearing Jan. 10.

Times staff writer Cristina Lee contributed to this report.