ORANGE COUNTY IN BANKRUPTCY : ROUNDUP OF THE INVESTIGATIONS
These regulatory and law enforcement agencies are looking into the investment practices that led to the Orange County financial crisis:
SECURITIES AND EXCHANGE COMMISSION
What it does: Federal agency regulates stock and bond brokers and the security industry as a whole.
Role in the bond crisis: The SEC has subpoenaed extensive records from the five-member Board of Supervisors and at least three financial advisers who helped the county issue bonds, the proceeds of which found their way into the troubled county investment pool.
NATIONAL ASSN. OF SECURITIES DEALERS
What it does: An industry self-regulatory organization that oversees stock and bond brokerages and their employees.
Role in the bond crisis: The NASD is investigating $3,000 in contributions from three Merrill Lynch employees to former county Treasurer-Tax Collector Robert L. Citron during his reelection campaign earlier this year.
COMMODITY FUTURES TRADING COMMISSION
What it does: A federal watchdog agency that monitors activity on the various commodity market exchanges. It does for commodity futures trading what the SEC does for stock and bond trading.
Role in the bond crisis: The CFTC is reviewing documents to determine whether the county investment portfolio held any futures commodities and, if so, whether federal regulations were followed.
ORANGE COUNTY DISTRICT ATTORNEY’S OFFICE
What it does: The county office prosecutes criminal violations of state and local law. It also represents the government in civil suits to collect taxes or take property for public use.
Role in the bond crisis: Probing the bond controversy, including possibly checking allegation that Citron accepted improper gifts from investment firms.
U.S. ATTORNEY’S OFFICE
What it does: As an arm of the U.S. Department of Justice, the office prosecutes criminal violations of federal law.
Role in the bond crisis: Trying to determine if the U.S. mail or telephone wires were used to defraud investors in the now-collapsed county investment pool.
