Regulator Issues Report On Fake New Mexico Audit

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New Mexico's securities regulator says in a new report the New Mexico Finance Authority's former controller was able to forge a financial audit because of management and oversight failures at the agency.

The Securities Division said Monday those problems were aggravated by a "culture of complacency" at the authority that played down the importance of the audit to investors and placed too much of an emphasis on obtaining high credit ratings for agency bonds.

Former authority CEO Rick May disputed the report's conclusions.

Ex-controller Greg Campbell pleaded guilty last week to forgery and securities fraud for faking the authority's financial statements to make it appear they had been audited by an independent accounting firm.

The authority provides low-cost loans to cities, counties, schools and other governmental organizations for capital improvements.

Copyright 2012 The Associated Press.