SEC Accuses Montebello Unified of Defrauding Bond Investors
The Securities and Exchange Commission has accused the Montebello Unified School District of defrauding investors in the sale of $100 million in school construction bonds. A legal filing names Supt. Anthony J. Martinez and former chief business officer Ruben James Rojas who are accused of misleading investors about the district’s management and fiscal health.
“The actions could have led to more favorable interest rates, and lower costs, than the Montebello Unified School District would have otherwise received for its construction projects,” a source told the Los Angeles Times.
“In December 2016 the district was ready to start selling the bonds. The bond filings submitted by Rojas indicated merely that the audit was behind schedule. To suggest that all was well, Rojas instead supplied a clean audit from the prior year, the SEC filing states. The district submission did not mention that officials had just fired their auditing firm, which had called for further investigations.”
Martinez has agreed to pay a $10,000 fine without admitting to wrongdoing. Rojas will face charges in court. The district has agreed to implement new controls and training, and to hire a consultant to review current protocol.
Read more at the Los Angeles Times.