Local News in Brief : Water District May Sue
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After revealing that the Three Valleys Municipal Water District had lost the entire $1.5 million it invested last November through E. F. Hutton & Co., the district’s board of directors has voted to take unspecified legal action against the investment firm.
The water district, which serves the eastern San Gabriel Valley, may join a cooperative legal effort with the cities of Lawndale, Palmdale and San Marino, which together say they lost more than $9.5 million in public funds after making investments last year with an E. F. Hutton account representative in Universal City.
The money was used to purchase government bonds “on margin,” meaning that the investors borrow money to buy securities. Three Valleys, which rejected a cash settlement from E. F. Hutton, alleges that the investment firm engaged in margin trading without authorization and made misleading statements to the district about its investments.
E. F. Hutton refused to comment.
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