Thu November 10, 2011
Regulators Want LGC to Turn Over Control To Neutral Party
State regulators suggested the Local Government Center turn over control of its operation and assets to a neutral party.
The Securities Bureau Director says that’s the best way to address fundamental problems within the organization.
The Local Government Center, the group that provides insurance to cities and towns, faces four charges it violated state laws.
The Securities bureau alleges that LGC owes municipalities upwards of $100 million dollars.
Securities Bureau Director Joseph Long says he would like LGC officers and their public board to step aside and let a neutral party sort out the organization’s problems.
“Somebody needs to sit down and sort this thing through. Find out, run the money. Obviously clear up what needs to be paid back, if any.”
Long’s office does not have the legal authority to force LGC into receivership.
A lawyer for the Local Government Center says his client has no plans to hand the company over, nor are there adequate grounds to make such a move.
He points out the Securities Bureau itself has not formally requested that LGC go into receivership.