BRADENTON, Fla. – Former Miami budget director Michael Boudreaux has been ruined financially fighting securities fraud charges and cannot pay the $450,000 civil penalty sought by the Securities and Exchange Commission, his attorney, Benedict Kuehne, said in a court filing Monday.
"Mr. Boudreaux is a man of limited means who has no assets," Kuehne wrote in response to the SEC's request for final judgment in the long-running case. "He is in no position to pay any significant civil monetary penalty now or at any time in the future."
In addition to the $450,000 fine, the SEC has asked that federal Judge Cecelia Altonaga impose a permanent injunction barring Boudreaux from committing future violations of the anti-fraud provisions of federal securities laws.
The judgment requested by the SEC stems from a trial Sept. 15 in which a federal jury found Boudreaux and the city of Miami guilty of defrauding investors by not disclosing the city's true financial picture in connection with three bond issues in 2009.
Boudreaux was found guilty on three of four counts involving violations of the Securities Act and Rule 10 of the Exchange act, and was exonerated on one count of fraud in Violation of Section 17(a)(1) of the Securities Act.
The SEC's request is inconsistent with the statutory factors for the imposition of monetary penalties, Kuehne said.
"This court should conclude that no monetary penalties are appropriately assessed against Mr. Boudreaux, or alternatively, impose a monetary penalty of $5,000," he said. "Additionally, because there is no reasonable likelihood Mr. Boudreaux is able to engage in any future conduct that is likely to violate the securities laws this court should deny the SEC's request for injunctive relief."
Kuehne said the evidence at trial showed that Boudreaux "will not and cannot work in any municipal budget or finance capacity, and has no opportunity to work with securities or bonds" since being accused of securities violations.
However, the SEC pointed to Boudreaux's current resume, which states: "My career objective is to receive a position in public accounting/governmental finance with the potential for challenge and fulfillment."
Since leaving Miami in the spring of 2010, Boudreaux has been the business manager at Lafon Nursing Facility of the Holy Family in New Orleans where he made $104,000 last year.
Miami agreed to pay a record $1 million civil penalty in a settlement that was reached after the trial.
The agreement, which also included a permanent injunction against future securities violations, was approved by Altonaga on Oct. 26.
Boudreaux has refused to settle with the SEC, and his attorney has said that the jury's verdict would be appealed.
In a statement Tuesday, Kuehne said the SEC's effort to punish his client for refusing to admit to something he did not do intentionally is not a component of the securities laws.
"Mr. Boudreaux calls upon the SEC to abandon its efforts to bring him to personal ruin for city decisions that did not enrich him, did not result in any actual loss to any person or institution, and did not create a significant risk of substantial losses to anyone," Kuehne said, adding that the SEC's requested penalty "exceeds the bounds of fairness and justice."
In 2013, the SEC filed a federal civil suit against the city and Boudreaux charging them with securities fraud for making "misrepresentations and omissions to investors" in 2009 bond offering documents and in financial statements that were designed to "mask" a deficit in the city's general fund.
