KND also suggests ‘bond underwriter’ label is wrong
By Shea Johnson
Posted: Jan. 20, 2016 at 2:54 PM
Updated: Jan 20, 2016 at 5:28 PM
VICTORVILLE — The investment banking firm entangled in the Securities and Exchange Commission’s crosshairs for an allegedly fraudulent municipal bond offering at the city’s airport says it can’t fund a defense and it was never actually the bond underwriter.
Along with Victorville, its airport authority and Assistant City Manager Keith Metzler, the firm Kinsel, Newcomb & De Dios was sued in April 2013 by the SEC over a 2008 offering that the federal agency claims grossly inflated the value of four hangars at Southern California Logistics Airport and hence defrauded investors.
KND has routinely been described as the bond’s underwriter in federal records, but in a claim the firm filed last month seeking indemnification from the airport authority (SCLAA), the firm says the “underwriter” label was falsely assigned by the authority.
“KND is entitled to relief against SCLAA because KND was named a defendant in the referenced litigation,” the claim stated, “after SCLAA caused documents to be issued in connection with the offering for the 2008 Series A Bonds … in which SCLAA falsely identified KND as ‘underwriter.'”
The Victorville City Council on Tuesday, however, rejected KND’s request for protection from any losses and damages including attorneys fees, saying that “any basis for this claim was terminated by way of the Authority’s June 29, 2015, settlement and release agreement with the claimant.”
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