A Los Angeles County school superintendent agreed to pay $10,000 to settle charges that he and his school district defrauded investors in a $100 million bond offering three years ago, the SEC said today.

The SEC's civil complaint, filed in U.S. District Court in the Southern District of California, alleges that the Montebello Unified School District, school Superintendent Anthony Martinez, and the district's former chief business officer, Ruben Rojas, hid from investors concerns that were raised by an independent auditor about potential fraud and internal control issues.

"The offering documents for Montebello's December 2016 bonds failed to disclose this information to investors and instead included a copy of the district's audit report from the prior fiscal year," the SEC said in a press release.

The independent auditor raised the issues both before and concurrent with the school district's bond issue, but the district withheld the money needed to allow the firm to complete the audit and instead terminated the firm, the SEC said. 

Rojas helped prepare misleading offering documents and hid the audit firm's concerns "by providing deceptive updates about the status of its pending audit to various gatekeepers, including the disclosure lawyers who worked on the bond offering," the SEC said. The bond offering also failed to disclose that the audit firm had been fired, and instead listed the firm as the district's independent auditor, the SEC said.

"Montebello also attached to the offering documents an audit report from the audit firm from a prior year that contained a clean audit opinion," the SEC said in court filings.

Martinez signed the final bond offering document and made false certifications in connection with the bonds, the SEC said. At the time, Martinez had held the position of interim superintendent for six weeks. He was named permanent superintendent of the district in February 2018, the SEC said. The Montebello district spans multiple cities in eastern Los Angeles County and has a $300 million annual budget and a $300 million bond program, the SEC said.

The Montebello school district and Martinez, without admitting to or denying the charges, agreed to settle with the SEC, the agency said. Montebello was ordered to cease and desist from future violations and agreed to hire an independent consultant to evaluate its policies and procedures related to its municipal securities disclosures, the SEC said.

Martinez was ordered to cease and desist from future violations and ordered to pay a $10,000 penalty.

Rojas is facing civil fraud charges in the lawsuit.