Sunday, January 21, 2018
Education

Pasco School Board to sue Citigroup over fraud allegations

LAND O'LAKES — Rushing to beat a June 30 deadline, the Pasco School Board on Tuesday decided to sue Citigroup over allegations of fraud in bond issuances from 2007 and 2008.

The district stands to recoup up to $10 million if the action is successful, superintendent Kurt Browning told the board in recommending the suit.

It does not face any out-of-pocket costs to pursue the case.

"I'll take $8 million to $10 million any way I can get it, legally," Browning said. "We have agonized over this because we want to make sure we have a solid claim."

He would have waited, except the Florida Supreme Court recently ruled that such cases had a six-year statute of limitations. That deadline comes at the end of the month, prompting the quick action.

The item did not appear on the board's agenda.

Attorney Jim Magazine advised the board that it has a solid claim against Citigroup regarding the auction rate securities that the district sold.

He said his firm and others have won seven cases around the country, and have several other cases ongoing.

The issue, he said, is that the financial institutions were marketing the securities even though they had no organic market. The institutions then propped up the market with their own funds, Magazine said, eventually pulling out at a high cost to the school district.

Internal emails the lawyers have detail the specifics in depth, to the point that the issuers are settling these cases, Magazine said.

"We know as late as you got issued, they knew industrywide that this was going to fail," Magazine told the board. "They were going to get the interest on all the bonds when it failed, and then you were going to refinance."

Board chairwoman Cynthia Armstrong raised concerns of whether the lawsuit would affect the district's other bond dealings.

Assistant superintendent Ray Gadd said the district recently hired Citigroup for other bond deals, and mentioned the suit might occur.

"They indicated they still wanted our business regardless," Gadd said.

If the district is successful, the law firm would get 35 percent of the winnings, plus costs. It is unclear how the district's share of the funds could be used.

"I'd much rather get a percentage of some money rather than let this opportunity go by," board member Joanne Hurley said.

Jeffrey S. Solochek can be reached at [email protected]

Comments
USF leaders move to calm fears over consolidation plan

USF leaders move to calm fears over consolidation plan

ST. PETERSBURG — Holding a piece of computer paper and a microphone, the leader of the University of South Florida St. Petersburg began a Friday afternoon forum by repeating the USF administration’s new mantra.He reassured the crowd before him that t...
Published: 01/19/18

Crews Lake thespians overcome the odds

SPRING HILL — It’s 8:30 a.m. — "homeroom" period in school speak — when kids in the Crews Lake Middle School drama club file into an empty chorus room to begin rehearsing under the direction of language arts teacher Kristen Sykora. There’s only 25 m...
Published: 01/19/18
Cuts hit top school leaders as Hillsborough sheds three six-figure salaries

Cuts hit top school leaders as Hillsborough sheds three six-figure salaries

TAMPA — Hillsborough County school superintendent Jeff Eakins on Friday announced the first in a series of belt-tightening moves that include the elimination of three six-figure positions.Jobs now held by Wynne Tye and Larry Sykes will no longer exis...
Published: 01/19/18
Tampa Bay schools warn parents about flu activity, dangers

Tampa Bay schools warn parents about flu activity, dangers

The Florida Department of Health has reported a sharp increase in flu activity in the last several weeks, prompting area schools to send out letters warning parents about the virus. At least two districts, however, say that flu activity in their scho...
Published: 01/19/18

More than 400 apply to Pasco technical high school

School choice for 2018-19 is in full swing, and district officials said they’ve been pleased with the interest they’ve seen so far.The window for applying to the district’s magnet schools closed Jan. 12, except for applications for the new Wendell Kr...
Published: 01/18/18
Read the report on the fatal FSU frat party: ‘The most intoxicated’ they had ever been

Read the report on the fatal FSU frat party: ‘The most intoxicated’ they had ever been

"On Nov. 3, 2017, the Tallahassee Police Department responded to 1012 Buena Vista Drive … in reference to a death investigation."So begins a charging document in the case of Andrew Coffey, the 20-year-old Florida State University student who was foun...
Published: 01/18/18
In St. Petersburg, skeptics sneer at plan to concentrate USF power in Tampa

In St. Petersburg, skeptics sneer at plan to concentrate USF power in Tampa

In the state capitol on Wednesday, lawmakers breezed through the bullet points of a higher education bill. They skimmed past a hot-button proposal to consolidate the University of South Florida System into a single university without a peep of pushba...
Published: 01/18/18
Five things to know about teacher pay negotiations in Hillsborough

Five things to know about teacher pay negotiations in Hillsborough

TAMPA — They were hoping to receive between $15 million and $17 million in scheduled pay raises. But the Hillsborough County school district says it can’t afford to give its teachers anywhere near that much, while the teachers say they deserve nothin...
Published: 01/17/18
Updated: 01/18/18
Young Pasco teacher faces cancer with support of students

Young Pasco teacher faces cancer with support of students

NEW PORT RICHEY — At age 28, things were really shaping up for Joel Santos-Gonzalez. Fulfilling his lifelong dream of becoming a teacher, he had just completed his third year at Gulf Middle School."I always liked to talk to people on an intellectual ...
Published: 01/17/18
Updated: 01/18/18
In Pinellas and beyond, deadlines for school choice are closing in

In Pinellas and beyond, deadlines for school choice are closing in

It’s decision time in Pinellas County and other local school districts as several school choice deadlines are upon us.For Pinellas families who want to apply for a magnet, fundamental or high school career program for the 2018-19 school year, the dea...
Published: 01/17/18
Updated: 01/18/18