WASHINGTON — Miami and former budget director Michael Boudreaux have requested a jury trial and denied most of the Securities and Exchange Commission's fraud allegations in recent federal court filings.
The defendants' earlier this month challenged the SEC complaint, which was filed last year in a federal court in Miami. The SEC charged them with making "numerous material misrepresentations and omissions to investors" in 2009 bond offering documents. It charged Boudreaux with orchestrating misleading interfund transfers designed to mask a deficit in the city's general fund.
The city and Boudreaux denied any wrongdoing, and admitted only to the basic facts of the case.
U.S. District Judge Cecilia Altonaga in December denied motions to dismiss the case that the city and Boudreaux submitted to the U.S. District Court for the Southern District of Florida. The city had called for dismissal on grounds that the SEC suit failed to "connect the dots" to false and misleading statements and relied on information that was not material to the disputed documents. Boudreaux's lawyers argued that he is immune from suit because he was functioning in his official duties.
In the new filings, Miami admitted raising about $153.5 million in bond offerings in May, July, and December 2009, but denied the SEC's accusation that it misled investors. The city also denied falsely inflating its financial reserves and providing false information on its comprehensive annual financial reports. It said it did not mislead rating agencies with allegedly inaccurate information.
The city admitted Boudreaux emailed the finance department on Oct. 21, 2008 and that it subsequently approved a transfer of $3.1 million to the general fund, but denied that Boudreaux cooked up a false justification for moving the money. The SEC claimed the city determined in 2010 that the transfer was improper, which Miami also denied.
Boudreaux was even more sweeping in his denial of the SEC allegations, including that he engaged in wrongdoing with the $3.1 million transfer as well as other transfers of $24.4 and $13.3 million. As most of the commission's complaint targets the city and not Boudreaux, he repeatedly denied having "sufficient knowledge and information to form a belief about the truth of the allegations." A two-week window for trial has already been set for September.
