Investigators seek thousands more documents as defense counsel feels overencumbered
March 16, 2014 5:21 PM
Shea Johnson, Staff Writer
VICTORVILLE • Attorneys for the city and its airport authority say they have negotiated the volume of the Securities and Exchange Commission’s most recent records request down from 6 million to 366,250, but even with 10 full-time contract workers reviewing approximately 4,000 documents per day it’s unrealistic to think they could meet a proposed April deadline.
The current push in the latest discovery phase by federal securities officials, which began in October, comes amid a fast-approaching April 1 due date for the SEC to prove the city and Assistant City Manager Keith Metzler earned ill-gotten gains from an allegedly fraudulent 2008 municipal bond offering. The allegation, referred to as a prayer for disgorgement, was reinstated in January against the airport authority, which Metzler oversees in his role.
According to court documents filed earlier this month, counsel for the city and airport authority have turned over more than 27,000 records to the SEC since October. However, federal securities officials contend they have gotten not a single one, even as they’ve asked the defendants to prioritize the production of documents to only issues concerning monetary relief. Meanwhile, defense attorneys estimate another 56,113 documents could be produced before March 27.
While an SEC representative declined comment this week citing the ongoing investigation, an attorney for the city and the Southern California Logistics Airport Authority called the latest records request “a fishing expedition,” but felt it would be resolved “one way or another.”
“We’ve been regularly producing documents for them since the complaint was filed (in April),” said Terree Bowers of Los Angeles-based Arent Fox LLP. “And we’ve been working with them to narrow the scope of their requests, or we’d be producing documents for the next decade.”
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