BRADENTON, Fla. — The Securities and Exchange Commission sent the Florida State Board of Administration a one-paragraph letter last week stating that the agency will not recommend enforcement action regarding the meltdown of what was one of the largest local government investment pools in the country.

The SEC letter was posted Friday on the SBA’s Web site after being received earlier in the week.

State officials said they were relieved to hear about the outcome of the investigation.

When asked why the probe did not result in enforcement action, Glenn Gordon, associate regional director in the SEC’s Miami office, said, “I can’t confirm or deny a particular investigation.”

Speaking generally, Gordon said, “Our investigations are about fact-finding and legal theories and we do not recommend an action as the result of every investigation.”

In May 2008, the SEC sent a letter to the state board that oversees the local government pool seeking a host of documents concerning investment guidelines and restrictions, brokers, securities purchases, and fund qualifications.

Two months later, the commission notified the state that it was conducting a formal investigation centering around securities sold to the pool by the now-bankrupt Lehman Brothers along with JPMorgan, and Credit Suisse Securities LLC.

Those are the same firms Florida still is negotiating with over allegations that they may have sold the local government pool unregistered secured notes that were not exempt from registration under the Securities Act of 1933.

Those allegations were an outgrowth of a run on the $24.5 billion investment pool in late 2007 out of fears over subprime mortgage investments.

Some $10 billion of sudden withdrawals in a two-week period caused assets to plummet, which then required the SBA to freeze withdrawals to protect the remaining assets.

Today the pool, which is known as Florida Prime, has dwindled to $6 billion in assets.

Some pool participants still suffer problems and potential losses from investments in troubled securities in a separate account within the pool.

Florida officials adopted stringent policies for the state’s pool requiring managers to operate under the same standards as a money market fund registered with the SEC.

The state also hired outside managers for the program and established an advisory committee composed of pool participants.

While the pool did not have any direct investments in subprime mortgages, there were investments in asset-backed commercial paper, some with subprime exposure that experienced rapid rating downgrades. That, in turn, fueled speculation leading to the run on the pool.

State officials then divided the pool into Fund A and Fund B. Distressed and defaulted securities were placed into Fund B, which enabled Fund A to qualify for a stable, AAAm rating from Standard & Poor’s.

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