Judge Reluctantly OKs Citron, Raabe Deal

By DAVAN MAHARAJ

May 15, 1996 12 AM PT

TIMES STAFF WRITER

SANTA ANA — A federal judge who had expressed concern that settlement of securities fraud charges against former Orange County Treasurer-Tax Collector Robert L. Citron and Assistant Treasurer Matthew Raabe was too lenient has reluctantly approved the deal.

U.S. District Court Judge Gary L. Taylor maintained the deal between the U.S. Securities and Exchange Commission and the two former officials provided “little in the way of enforcement action.”

But the judge ruled that the settlement appears to “advance the SEC’s goal and public interest . . . to deter future violations of the securities law and to protect the public marketplace.” The judge’s ruling was made public Tuesday.

Taylor signed off on an agreement reached earlier this year between the SEC and the former county officials. Citron and Raabe did not admit or deny any wrongdoing but promised not to violate any federal securities laws in the future. The SEC did not impose any additional sanction on Citron or Raabe, who have also agreed to cooperate with agency officials investigating Orange County’s 1994 financial collapse.

At an unusual hearing six weeks ago, Taylor questioned whether the settlement was “an empty gesture” and whether the SEC was too light on Citron and Raabe, who each were separately charged by local authorities with six felonies in connection with the largest bankruptcy in U.S. municipal history. Citron has pleaded guilty to the charges and is awaiting sentencing. Raabe has vowed to fight the charges.

Taylor further ordered SEC lawyers to provide him with a confidential report of the agency’s ongoing investigation into the county’s bankruptcy.

In his judgment, Taylor said that under the deal, Citron and Raabe were ordered to “obey the law, which they are already required to do. Each consents to certain cooperation, which could be secured from them through ordinary subpoenas. . . . These remedies are of nominal significance,” the judge said.

Taylor, however, said he found no evidence that the settlement was “unfair, inadequate or unreasonable. On the contrary, the decrees appear to advance the SEC’s goal and the public interest.”

A top SEC official in Los Angeles on Tuesday welcomed the judge’s decision, but declined to comment further.

“We are satisfied the court has approved and entered the judgments,” SEC associate regional director Sandra Harris said.