Wymer Will Settle in SEC Civil Suit : Securities: The deal won’t affect the criminal case against the Newport Beach investment adviser.

Newport Beach investment adviser Steven D. Wymer has agreed to settle a civil suit accusing him of masterminding a $113-million securities swindle, the Securities and Exchange Commission said Monday.

The move frees the SEC from prosecuting Wymer on civil fraud charges and allows the agency to focus on recovering investors’ money. The SEC will also seek stiff financial penalties against the money manager accused of bilking dozens of cities in California, Iowa and Colorado that had entrusted taxpayer funds to Wymer for investment.

But the settlement will not affect the criminal case against Wymer, 43, who has pleaded not guilty to 30 felony counts of securities fraud, money laundering, obstruction of justice and other federal charges.

Under the settlement, Wymer neither admitted nor denied guilt and agreed not to violate securities laws in the future. He will not lose his securities license, said Michael Perlis, Wymer’s Los Angeles attorney.

“We’ve early on indicated to people that Steve had not lined his pockets with this $113 million, and this leaves the avenue open for the SEC to prove to the contrary--if they think they can,” Perlis said.

Perlis has said Wymer lost his clients’ money in bad investments. The U.S. attorney alleges that Wymer’s two Irvine companies, Institutional Treasury Management Inc. and Denman & Co., were “built on fraud.”

Through the two companies, Wymer managed $1.2 billion for 65 clients, mostly small cities and counties, banks, pension funds and thrifts. Prosecutors say he sent clients fake or forged financial statements that lulled them into believing that their money was safely invested in U.S. government securities.

When the SEC obtained a court order in December freezing Wymer’s assets, 15 clients discovered that their money had vanished. Ten California cities, including Orange and Torrance, have lost a total of $45 million.

But the books are hopelessly tangled because Wymer is alleged to have sent clients statements for trades he never made, co-mingled investor funds, shuffled money between accounts to try to keep the SEC from discovering that some accounts were empty and destroyed incriminating documents that would have shown where the money went.

Meanwhile, cities in Iowa and California are wrangling in two states over who owns what money is left.

In a separate legal action, the U.S. attorney’s office has seized between $10 million and $15 million of Wymer’s personal assets, including four homes, 13 cars and bank accounts containing several hundred thousand dollars.

But until authorities document where the missing millions went--a process the SEC said could take until summer--it will remain unclear how much investors can hope to recover.