Update: Complaint Says Martha Shoffner Accepted $6,000 Payment from Broker

by Gwen Moritz and Lance Turner  on Monday, May. 20, 2013 1:04 pm  

Martha Shoffner, in this file photo from December. (Photo by AP Photo/Danny Johnston)

The Division of Legislative Audit last year analyzed bond trades conducted for the State Treasurer during a 45-month period. Shoffner’s office bought and sold bonds totaling $1.69 billion through the father-son team between July 1, 2008, and March 31, 2012.

The business was conducted first through Apple Tree Investments Inc. of Little Rock, where they worked for a year (with owner Steve Keifer, who was fined $50,000 by state regulators in 2009 for fraudulent sales tactics), and through St. Bernard Financial Services Inc. of Russellville, their employer since June 2009.

The tiny firms handled nearly twice as much bond business for the State Treasurer as the closest competitor, Morgan Keegan & Co. of Memphis. Morgan Keegan is now called Raymond James Morgan Keegan since its sale last April to Raymond James Financial of St. Petersburg, Fla.

Between July 22, 2009, and Oct. 5, 2011, bond trades for the State Treasurer generated commissions totaling more than $2.3 million for Apple Tree and St. Bernard, thanks to Steve and Steele Stephens.

Some of those bond trades cost the state hundreds of thousands of dollars in reduced profits.

During testimony before the Joint Auditing Committee in December, Shoffner couldn’t explain why the trades that produced less money for the state made economic sense or why her office did so much more business with those traders.

Shoffner, a Democrat in her second term as treasurer, has also faced questions about her use of campaign funds, specifically whether she converted campaign contributions to personal income.

Gov. Mike Beebe, also a Democrat, has called for Shoffner to resign.

"I think she should resign immediately," Beebe said, adding that the details provided by prosecutors are so specific that Shoffner has been rendered unable to lead.

"It would be very hard, in my opinion, for that office to properly function under her continued leadership," he said.

Democratic Attorney General Dustin McDaniel and the leader of the state Republican Party, Doyle Webb, have also called for Shoffner's resignation.



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