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The Securities and Exchange Commission today (December 11), settled a civil fraud action against Thomas J. Saiz and his accounting firm, La Mesa's Calderon, Jaham & Osborn, for helping to cook the books in City bond offerings of 2002 and 2003. Among many things, the SEC charged that the accounting firm, which no longer does City accounting, stated that the total amount the City had underfunded its pension contribution was funded in a reserve. But that was not true, said the SEC. The auditing firm also failed to disclose that the City would soon have to begin paying the substantial health care costs out of its own budget. The footnotes claimed that such costs were recognized as they were paid -- a misleading claim. In 2002, the pension plan had fallen below a funded level that the actuary would accept. But this was not reported. Without admitting or denying the allegations, Saiz and the firm said they would not violate securities laws. Saiz agreed to pay a $15,000 penalty.
The Securities and Exchange Commission today (December 11), settled a civil fraud action against Thomas J. Saiz and his accounting firm, La Mesa's Calderon, Jaham & Osborn, for helping to cook the books in City bond offerings of 2002 and 2003. Among many things, the SEC charged that the accounting firm, which no longer does City accounting, stated that the total amount the City had underfunded its pension contribution was funded in a reserve. But that was not true, said the SEC. The auditing firm also failed to disclose that the City would soon have to begin paying the substantial health care costs out of its own budget. The footnotes claimed that such costs were recognized as they were paid -- a misleading claim. In 2002, the pension plan had fallen below a funded level that the actuary would accept. But this was not reported. Without admitting or denying the allegations, Saiz and the firm said they would not violate securities laws. Saiz agreed to pay a $15,000 penalty.