SEC sues ex-Detroit officials, adviser on "gifts"

WASHINGTON Wed May 9, 2012 12:49pm EDT

WASHINGTON (Reuters) - U.S. securities regulators on Wednesday charged the former Detroit mayor and treasurer along with the city's public pension investment adviser with devising a secret exchange of "lavish gifts" to influence the pension fund's investments.

The Securities and Exchange Commission's case, filed in a U.S. district court in Michigan, alleges that ex-Mayor Kwame Kilpatrick and former Treasurer Jeffrey Beasley solicited $125,000 worth of perks paid for by advisory firm MayfieldGentry Realty Advisors LLC.

The SEC claims that MayfieldGentry's Chief Executive Officer, Chauncey Mayfield, in turn recommended $117 million worth of investments in a real estate investment trust controlled by his firm.

The SEC said these alleged conflicts of interest were never disclosed.

(Reporting By Lisa Lambert and Sarah N. Lynch; Editing by Gerald E. McCormick)

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