The district attorney isn't releasing any details on the charges until they all appear in court next week.
Authorities say former General Manager Patrick Lynch was taken into custody at his home in Torrance, and former events manager Todd DeStefano was arrested at a friend's house in Venice.
The owner of a music promotion company, Reza Gerami of Go Ventures, was also taken into custody at his home in Malibu.
Lynch, DeStefano and Go Ventures were all subjects of a fraud lawsuit filed last year by the Coliseum Commission. The lawsuit alleged that Lynch and DeStefano mismanaged funds and diverted money for their own use, and that Go Ventures and Insomniac Inc. conspired with the pair to keep revenue from raves from the Coliseum and its next-door sports arena.
"We feel there is no loss to the coliseum, no loss of any public money," DeStefano's attorney said in a statement.
Lynch and DeStefano both resigned from their posts.
Coliseum commissioner and City Councilman Bernard Parks has been raising questions about the two top executives for months. He said that the two managers likely fleeced the Coliseum of well over $1 million.
"It was pretty clear there was substantial evidence about diverting funds and setting up dummy businesses to actually move funds that should have probably come to the Coliseum, so I'm not shocked, it was just a matter of time," Parks said.
Lynch allegedly received $400,000 diverted from coliseum payments. Regarding the arrest and charges, his attorney said, "I have been providing ongoing information to the district attorney proving conclusively that Mr. Lynch did not receive any illegal funds from any of the event promoters that have appeared in his 17 years of service."
The arrests have raised questions about the future of the Coliseum Commission. But the more immediate questions involve the money that was allegedly diverted, and whether any other commission officials or employees are involved.
City News Service contributed to this report.