Team Of 110 Federal Workers Battles Fairly Prevalent Securities Fraud In Miami

By Scott Blake
From its high-rise perch on Brickell Avenue, the US Securities and Exchange Commission’s Miami Regional Office has investigated everyone from South Florida’s slickest financial conmen to hallowed Wall Street banking giants

involved in the financial and mortgages crises.

The Miami office serves as the SEC Enforcement Division’s headquarters for Florida, Louisiana, Mississippi, Puerto Rico and the US Virgin Islands. Through the years, the office has brought securities violation charges against and reached payment settlements with a number of Miami firms.

"The state of Florida alone keeps us very busy," said Eric Bustillo, director of the Miami office. "Securities fraud is something that’s fairly prevalent in the tri-county area" of Southeast Florida.

"We’ve had a whole host of cases from the financial crisis," he added.

The Miami office sometimes works on cases in other jurisdictions, depending on the agency’s needs, including what has been called the largest municipal bankruptcy in US history in Alabama’s Jefferson County.

"That has been one of our biggest cases," said Lisa Roberts, the SEC’s chief attorney advisor in Miami.

Jefferson County, which includes Birmingham, filed for bankruptcy protection in November in connection to a multibillion-dollar debt from the issuance and sale of municipal sewer bonds there.

The case has resulted in numerous bribery, corruption and fraud charges against elected officials and financial professionals involved with the deal, including a prison sentence for former Birmingham Mayor Larry Langford.

The SEC usually prosecutes civil cases involving securities violations, but the agency also can turn cases over to other law enforcement agencies to pursue criminal charges.

The SEC has assigned about 110 accountants, financial experts, lawyers, prosecutors and others to the Brickell office — about double the size of the staff here 20 years ago, Ms. Roberts said.

The highly secured office occupies the 17th and 18th floors and some of the 19th floor at 801 Brickell Ave. in the heart of the city’s financial district.

At any given time, the office may have hundreds of cases open at various stages of investigation, from tips that need to be checked out to charges and settlements being finalized, Mr. Bustillo said.

Mr. Bustillo’s office made headlines last week when it charged the holding company for one of Florida’s largest banks, BankAtlantic Bancorp, and its top executive, Alan Levan, with misleading investors about problems in one of its loan portfolios. Mr. Levan has rebutted the charges.

The office also made headlines last month, when it subpoenaed Miami-Dade city and county officials to turn over records related to the bond financing of the $600 million-plus stadium and parking complex in Little Havana for Major League Baseball’s Miami Marlins.

Mr. Bustillo said the SEC is using more staffers, a new "whistleblower" program and increased coordination with other law enforcement agencies to help the SEC bring a record number of cases against securities scofflaws.

Overall, the SEC filed a record 735 enforcement actions in 12 months that ended Sept. 30.

"Starting in December 2010, we initiated a more coordinated" approach to working with other agencies, Mr. Bustillo said, including the US Attorney’s Office, Federal Bureau of Investigation and Internal Revenue Service.

Following the financial crisis that started in 2008, the Enforcement Division underwent its most significant reorganization since it was created in the 1970s, the SEC said. That included revamping the way it handles tips.

Under a whistleblower program created through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, tipsters can receive awards if they voluntarily provide the SEC with original information that leads to successful enforcement actions.

"We’re getting a tremendous amount of information coming in," Mr. Bustillo said. "It has allowed us to be more proactive."

Given Miami’s many connections to international banking and investment circles, Mr. Bustillo said, the SEC’s Brickell office has handled its share of cases under the federal Foreign Corrupt Practices Act.

The law requires companies, including foreign firms, whose securities are listed in the US to meet standards for accounting transparency. The law also has provisions to stop US companies and their representatives from bribing foreign officials.

In addition to investigations that fall under the SEC’s enforcement programs, the Miami office handles the agency’s examination programs, which includes audits of securities brokers and dealers, investment advisors and others in the financial industry.

Nationwide, the SEC has fewer than 4,000 employees, Mr. Bustillo said, "very small considering the size of the industry we oversee."To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.