Civil Suit in Wymer Case Settled : Courts: The decision frees the SEC to focus on recovering investors’ money lost in the alleged scam. The action does not affect the criminal case against the Newport Beach investment adviser.

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

The move frees the SEC from the burden of 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 43-year-old 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, who has pleaded not guilty to 30 felony counts of securities fraud, money laundering, obstruction of justice and other federal charges.

Under the settlement announced Monday, 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 F. Perlis of Los Angeles, an attorney for Wymer.

“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” dating as far back as 1986.

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, commingled 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.

Now Iowa and California cities are fighting legal battles 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 the whereabouts of the missing millions--a process that authorities say could take until summer--it will be unclear how much investors will recover.

“A hundred million dollars is missing,” said Lori A. Richards, assistant administrator for enforcement with the SEC in Los Angeles. “We don’t know what happened to that money. If (Wymer) himself obtained any of that money, he’d be liable for it in additional penalties.”

Wymer resigned as president of his two companies in December, days before the SEC sued him. A court-appointed receiver recommended last week that ITM and Denman be placed into bankruptcy.

The two companies have $456,000 in cash, $360,000 in liabilities and no major assets that could be sold off, said Robert E. Carlson, the receiver. In addition, a number of former clients are likely to sue ITM and Denman for misappropriation and mismanagement of funds “in amounts far exceeding the assets of the companies,” Carlson said.

Wymer has told the court he will not oppose a bankruptcy filing, Perlis said.

Wymer is free on bail but is required to wear an electronic ankle bracelet to monitor his movements. He has, however, been permitted to travel to Colorado to visit his 20-year-old daughter, who was severely injured in an accident last month and remains in critical condition.