Wednesday, March 4, 2015

Securities complaint arising from Shoffner case settled for $25,000 fine

Posted By on Wed, Mar 4, 2015 at 3:59 PM

CASE CLOSED: St. Bernard Financial, based in Russellville, has ended a securities investigation by agreeing to a $25,000 fine over supervisory policies related to a salesman who paid bribes to the state treasurer.
  • CASE CLOSED: St. Bernard Financial, based in Russellville, has ended a securities investigation by agreeing to a $25,000 fine over supervisory policies related to a salesman who paid bribes to the state treasurer.

Robert Keenan
, CEO of St. Bernard Financial, reports that the company has settled a complaint that the firm failed to properly supervise salesman Steele Stephens, who paid kickbacks to then-Arkansas Treasurer Martha Shoffner for millions in state bond business. Stephens cooperated in a federal investigation that led to Shoffner's  federal fraud conviction. She's awaiting sentencing.

A hearing officer ruled that St. Bernard failed to provide a "reasonably designed" written supervisory policy and ordered a $25,000 fine. Specifically, the order said the company failed to prevent conduct of business by Stephens with Shoffner by non-firm e-mail accounts or archiving of those communications between 2008 and 2012.

Here's the hearing officer's order.
The consent order dismisses Keenan and applies only to St. Bernard.

Keenan told me by e-mail that he had presented expert witnesses and refused to admit any wrongdoing. As a result, he said, the department wanted to settle. Wrote Keenan:

In order to save face and avoid a costly hearing on whether my supervision of the bond sales by Steele Stephens was inadequate, they changed the complaint to "prior to December 1, 2012, St. Bernard's written supervisory and compliance policy failed to adequately address and prevent the usage of non-St. Bernard email accounts to conduct securities business by St. Bernard's registered agents,…". The part about email retention is not quite right - the emails they wanted to look at, I was able to provide, just not until later. It was cheaper to pay a fine over that than to go to a hearing, so I agreed. I have learned over the years that no matter how strong your case, you can get a bad judge and lose. We all know that sometimes, even when it's a lot of money, it's better to just get the thing over with and done.

As I've said all along, I didn't do anything wrong in the saga of Martha Shoffner. I was just a victim of the fallout of someone else's criminal activity. The order shows I was right.

Keenan has disputed characterizations of the sales to Shoffner as bad for the state. He said the firm sold from an inventory similar to those of other dealers and sometimes at lower cost. He said he didn't know of illegal activities between Stephens, who no longer has a securities license, and Shoffner.

Tags: , , , , ,

Favorite

Speaking of...

Comments (2)

Showing 1-2 of 2

Add a comment

 
Subscribe to this thread:
Showing 1-2 of 2

Add a comment

More by Max Brantley

  • Google says: It's Lee's Birthday in Arkansas

    Several people have been shocked in checking to see whether a business or government office was open today and found, along with normal hours, a statement that hours might vary because it is Robert E. Lee's birthday in Arkansas and hours might differ. No mention of Martin Luther King Jr.
    • Jan 16, 2017
  • Pork barrel included more than $40,000 for ozone therapy shipped from NWA to Benton

    Blogger Russ Racop uncovers another curious bit of spending of the pork barrel money known as the General Improvement Fund: Shipment of more than $40,000 from Northwest Arkansas legislators' allotment to a little-known outfit in Saline County that promotes an alternative medicine known as ozone therapy. Familiar legislative names were involved.
    • Jan 16, 2017
  • Women's march set Saturday, Jan. 21 in Little Rock

    Here's another march to plan for: The Women's March in Little Rock Saturday in conjunction with the post-inauguration event the same day in Washington, D.C.
    • Jan 16, 2017
  • More »

Readers also liked…

Most Shared

  • UPDATE: Retired Arkansas Arts Center director Townsend Wolfe dies at 81

    Townsend Durant Wolfe, III, retired director and chief curator of the Arkansas Arts Center, has died at 81.
  • Subpoenas identify names of federal interest in kickback probe

    The Northwest Arkansas Economic Development District today provided me with the subpoena it received from federal investigators in a probe that led to former Republican Rep. Micah Neal's guilty plea to taking kickbacks from money he guided to a nonprofit agency and a private college in Springdale, apparently Ecclesia College.
  • Human Services says it's eliminated Medicaid application backlog

    The state Human Services Department has informed Gov. Asa Hutchinson that it has all but eliminated a backlog in applications for Medicaid coverage.
  • Praising Asa

    Let us now praise the governor for a starkly moderate record, at least in comparison with other red-state executives.
  • Glass houses

    Having gotten a deep security briefing and probably a confidential glimpse of our own vast cyberspying operation, Donald Trump is no longer pretty sure that the Kremlin didn't hack Democratic computers or employ other tactics to help his election.

Visit Arkansas

Indian Rock House at Fairfield Bay

Indian Rock House at Fairfield Bay

Winter is the perfect time to explore the natural stone shelters where native Arkansans once lived

Most Viewed

Most Recent Comments

Blogroll

 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation