California financier A. Bruce Rozet allowed numerous problems "to run amok" in the huge portfolio of subsidized apartments he managed, said a judge who has upheld his suspension from federal housing programs.

Administrative Judge Jean S. Cooper accused Rozet's company, Housing Resources Management Inc., of "negligence and arrogance." Tenants' security deposits were misused and the Department of Housing and Urban Development was improperly billed for rent subsidies when apartments were vacant, the judge concluded Thursday.Rozet is chairman of the firm, and Deane Earl Ross is chief executive.

"The improper conduct of the corporation must be imputed to" the top officials, said Cooper, who also faulted HUD's oversight of the company.

HUD general counsel Frank Keating told The Associated Press on Saturday, "We're thrilled about the ruling. This is the first of many actions that (HUD Secretary Jack) Kemp insists be taken to turn around the quality of living in low-income housing."