Diann Shipione - Aftermath

Aftermath

The City of San Diego was the target of two federal investigations following revelations in January 2004 that financial documents used to secure bonds had been filled with errors and omissions.

In November 2006, the SEC entered an order sanctioning the City of San Diego for committing securities fraud by failing to disclose to the investing public important information about its pension and retiree health care obligations in the sale of its municipal bonds in 2002 and 2003. To settle that action, the City agreed to cease and desist from future securities fraud violations and to retain an independent consultant for three years to foster compliance with its disclosure obligations under the federal securities laws.

In 2007 the SEC filed a civil injunctive action for fraud against outside auditors for the city and its pension system. The auditors consented to the entry of a final judgment permanently enjoining them from violating the antifraud provisions of federal securities laws and paid a civil penalty.

In 2009 Shipione was admitted to the Harvard Kennedy School of Government Master's program in Public Administration. While at Harvard she remained active in the national public pension debate and participated in three separate Governmental Accounting Standards Board official Invitations to Comment regarding potential changes to pension accounting and financial reporting standards.

Shipione's husband, attorney Pat Shea, who received an MBA and law degree from Harvard in 1975, unsuccessfully ran for mayor in 2005, stating that the City should go into a Chapter 9 bankruptcy to address its financial problems.