South Bay : MONEY HUNT

Long before the Orange County debacle, another investment scandal shook the Southland, draining millions from the coffers of Torrance and other cities.

Now, frustrated Torrance officials have abandoned a fruitless--and pricey--bid to win back some of their $6 million by suing their former auditors.

The millions disappeared in 1991, when cities lost a hefty $100 million in an investment scheme involving Steven Wymer, a Newport Beach financial adviser. Wymer pleaded guilty to fraud and was sentenced to 14 years in prison--but most of Torrance’s money was still missing.

So the city attempted a fresh approach, contending that its former auditors, Deloitte & Touche, should have detected the fraud and should repay the losses. But a jury rejected that claim in May, and now the tables are turned, with City Hall agreeing to pay the auditors $161,800 for court costs and other charges.

Combined with legal fees, that means Torrance has spent $1.2 million on the case--or about one-fifth of what it lost in the scandal. But Torrance has not given up yet.

The city has recouped more than $1 million from settlements with other defendants, City Atty. John Fellows said. Now it is pursuing a new suit against a broker-dealer in search of the missing money.

The city’s chances?

“Of course, I’m optimistic,” Fellows said.