...the SEC settled with the five elected members of the Orange County board of supervisor who were in charge of country operations before it filed for bankruptcy in December 1994. The board members agreed to avoid future fraud violations, as did the Orange County Flood Control District, which also settled today.

The agency has been investigating their alleged failure to disclose adequately to public investors the severity of the county's finances. The bankruptcy filing came after the disclosure that the county's investment fund lost $1.7 billion after Citron made bad bets on the direction of interest rates.

The country supervisors named in the SEC filing today are Thomas Riley, William Steiner, Roger Stanton, Gaddi Vasquez and Harriett Wieder. Steiner and Stanton are still on the county board.

Attorneys for the county, Citron and Raabe didn't return phone calls.

The agency also issued a so-called 21A report, a critical account of the county supervisors' conduct that falls short of an enforcement action. The SEC issued a similar report nearly two decades ago on New York City's handling of its municipal finances.

"It strikes me as being a light penalty," said Fredric Weber, a public-finance attorney with Fulbright and Jaworski and former president of the National Association of Bond Lawyers. "The value of the historical precedent is undercut because it may lead other issuers to believe that the worst case for them might be embarrassment."


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Orange County, Calif., seven officials settle SEC charges