SEC probing Florida State Board of Administration's investment pool losses (Getting nervous, Jeb?)

[seafan]

Jeb Bush



SBA targeted in SEC probe

By Michael C. Bender | Monday, May 5, 2008, 01:56 PM

The state investments that were downgraded during the subprime mortgage meltdown have been targeted in a U.S. Securities & Exchange Commission probe, according to a Bond Buyer report today.


In a Feb. 22 letter, the SEC asked the State Board of Administration to hand over any information related to the buying or selling of at least 10 securities in the Local Government Investment Pool, the state pension and Citizens Property Insurance Corp. portfolios.

The SEC also requested resume and background information for all SBA traders, documents relating to the SBA’s authority to buy securities from the risky Rule 144A market and any communication to and from the SBA board of trustees.

SEC letter here



A brief synopsis of what happened:

Last year, J.P. Morgan and Lehman Brothers sold the board - which (allegedly) oversees Florida's panoply of pension and investment funds - about $2 billion in securities whose value collapsed days later. Financial officers for local governments learned of the weak investments and started a run on one of the state's funds. Last week, the state agreed to pay the West Palm Beach law firm of Berman DeValerio Pease Tabacco Burt & Pucillo $15,000 to determine whether Florida has grounds for a lawsuit against the brokers.

Drafts of an audit by the accounting firm Clifton Gunderson LLP provide ammunition for the state's attorneys. The State Board of Administration was not a federally qualified buyer for roughly a third of the rotten securities. On the surface, that's more proof of poor leadership by former SBA Director Coleman Stipanovich, who got the job because of connections to former Gov. Jeb Bush. Mr. Stipanovich's brother, one of the state's leading Republicans, advised Katherine Harris during the 2000 recount.

.....

The glaring political question now is whether Florida was a sucker for Lehman Brothers because Jeb Bush took a job there shortly after leaving office. Attorney General McCollum, stretching to find a silver lining, points out that the bad securities weren't subprime mortgage products. But they were tied closely enough to firms torpedoed by subprime loans that the distinction doesn't help.

Ms. Sink, who said the sales by Morgan and Lehman "reeked," has the correct attitude as the state tries to get its money back.

Much more background in these threads:


Forbes: Jeb Bush involvement with Lehman raises questions in Florida investment fund debacle, December 1, 2007


This is EXACTLY what has happened. And Jeb has been mighty quiet lately, too., December 19, 2007


Florida Got Lehman Help Before Run on School's Funds (Update1), December 19, 2007


Jeb emails St. Pete Times; denies role in FL SBA meltdown, December 19, 2007


FL State House Speaker Marco Rubio hires consultants to examine investment mess (And they are *friends* of Jeb), February 26, 2008 (This was announced *four days* after the SEC's letter (above) of February 22, 2008.) Fast work for your boss, Rubio.




The posse is on Jeb's trail.

[Vincardog]

1. The whole * Crime family sees politics as a way to loot the public.

[AnneD]

2. I can hear his ass cheeks

twitch from here in Texas. :rofl:

[flashl]

3. K&R