Torrance Fears $6 Million in Investments May Be Lost : Finances: City officials announce that money invested with Steven D. Wymer, who is charged with securities fraud, is not where it is supposed to be.

Grim-faced Torrance city officials have announced that more than $6 million in city funds is missing from a city account in the massive financial scandal connected to Newport Beach investment adviser Steven D. Wymer.

“We don’t know where the money is. . . . It’s not where it’s supposed to be,” acknowledged City Atty. Kenneth L. Nelson as he emerged from an emergency City Council meeting Friday evening.

Meeting behind closed doors, the council agreed to hire outside attorneys to try to recoup the more than $6.2 million believed missing from the city’s account. Only $93 remains.

Torrance is one of many cities, banks, schools and pension funds that were stunned last week by news that money may have vanished from accounts in Wymer’s Irvine-based financial network.

But Torrance officials hastened to add that their city, with a $100-million general fund, has sufficient reserves and operating cash to survive a $6-million loss.

“Our fiscal health is (good) enough to allow us to weather this,” Nelson said. And City Manager LeRoy J. Jackson agreed, saying the city had taken steps recently to enlarge its reserve funds.

Earlier Friday, a federal judge lifted a freeze on most of the money remaining in accounts managed by Wymer, who has been charged by federal authorities with securities fraud.

But officials offered little hope that they would recover more than $100 million that is allegedly missing or misappropriated.

Receiver Robert E. Carlson reported, however, that at least $760 million in 76 accounts appears to be mostly intact, and U.S. District Judge Richard A. Gadbois Jr. authorized release of those funds.

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

Earlier last week, Torrance officials had been hoping that their $6.2-million account with Wymer--intended for purchasing U.S. Treasury bonds--would be found intact. Not until Friday did they confirm that they are uncertain of the money’s whereabouts.

City Councilman Dan Walker, who said he was shocked by the news, did not fault city investment policies.

“I don’t think the city brought this upon itself,” Walker said. “Our city treasurer has told us there was nothing he felt he could have done to have avoided this type of theft from occurring.”

He added, “We’re obviously going to be making sure this situation never happens again.”

Friday’s court 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.

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 if convicted. He denies any wrongdoing.

Times staff writer Sonni Efron contributed to this report.