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SEC investigating Bell's usage of bond sales

October 16, 2010 12:00:00 AM PDT
The Securities and Exchange Commission has launched an investigation, looking into whether money from the sale of three bonds by the city of Bell was improperly spent.

This is more fallout from the state's audit of Bell's finances that found that city funds had been grossly mismanaged. Now, the SEC is investigating the sale of $70 million in bonds sold between 2005 and 2007.

In reports, state auditors were highly critical of how bond money was used in Bell, a city they said had virtually no fiscal controls.

Former City Manager Robert Rizzo and seven other current and former city leaders are facing public corruption charges.

Federal investigators have reportedly named those officials in a subpoena, seeking documents related to the bonds sales. The SEC has made fraud and municipal and state bond offerings a priority in recent years, and Bell officials will be required to testify under oath.

Bell residents have been very angry about the corruption scandal. A voter empowerment workshop in Bell was scheduled for Saturday to provide information about voter rights and procedures.