WASHINGTON - Orange County, Calif., officials may have violated securities laws by failing to disclose that the county's multi-billion dollar investment pool was having financial troubles because of derivatives and leveraged investments, according to federal regulators, a California accountant, and a review of bond documents.

County officials also may not have properly disclosed the market risks associated with the pool's investments or strategies for mitigating those risks in public statements and in the offering documents for their municipal bonds, the sources said.

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