Securities and Exchange Commission v. Dain Rauscher Inc., et al.
Published: Jan. 22, 2000 | Result Date: Aug. 18, 1999 | Filing Date: Jan. 1, 1900 |Case number: SACV98639GLT Bench Verdict – $0
Judge
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USDC Central
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Defendant
Facts
In a decision that may concern one of the last remaining pieces of litigation resulting from the largest municipal bankruptcy in United States history, Judge Gary Taylor dismissed charges brought by the SEC against defendant Ken Ough. Ough, a former senior vice president with Dain Rauscher Corporation, was accused of committing fraud in the sale of nearly $1 billion in notes by municipal issuers, which led up to Orange County's 1994 bankruptcy. Orange County's investment pool lost more than $1.6 billion due to fluctuation in interest rates. In an extremely rare occurrence for a major commission action brought by the SEC, the federal court judge dismissed the case pursuant to defendant's pre-trial motion for summary judgment. Most cases of this magnitude involving the SEC settle before going to trial. However, Ough refused to settle, desiring full clearance of his name and reputation. Judge Taylor agreed that the facts were not in dispute and that a reasonable jury could only find that the defendant met the standard of care in disclosures of investments made with the Orange County Investment Pool. The SEC has appealed the decision to the Ninth Circuit of Appeal.
Other Information
John Hitt settled for $100,000 policy limits before trial.
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