State Securities Regulator Heath Abshure Disputes Ethics Complaint by Stephens Inc.

by Gwen Moritz  on Monday, Dec. 2, 2013 12:00 am  

Heath Abshure, shown in a file photo from 2011, has been commissioner of the Arkansas Securities Department for six years. (Photo by Jason Burt)

Stephens Inc. of Little Rock has accused Arkansas Securities Commissioner Heath Abshure of illegally steering more than $170,000 to his “favorite charities” and of retaliating when Stephens refused to make such a donation while negotiating a recent settlement.

“That’s absolutely insane,” Abshure said of the allegations included in a complaint Stephens filed last month with the Arkansas Ethics Commission.

Abshure denied, sometimes in salty language, any ethical or legal breach. Instead, he questioned the motives of executives at the state’s dominant investment firm, which agreed in August to pay a $25,000 fine for failing to supervise agents who sold certain exchange-traded funds in 2008-09.

“I don’t think Stephens gives a rat’s ass where I send money from my other settlements,” Abshure said in an interview with Arkansas Business. “They’ve decided to attack me personally because we came after them.”

Abshure also suggested that Stephens might be trying to punish him for being “so vocal in my critique” of the investment industry’s self-regulating organization, FINRA, during his recent term as president of the North American Securities Administrators Association. (See sidebar here.)

But David Knight, the Stephens Inc. general counsel who filed the ethics complaint, said his issues with Abshure were strictly professional.

“Here he was exhibiting the same conflicts of interest that he’s supposed to be protecting the public against,” Knight said. “Nothing personal.”

Pending complaints filed with the Ethics Commission are not subject to the state’s Freedom of Information Act, and the commission could not confirm that Stephens’ complaint had been filed.

However, Stephens Inc. provided Arkansas Business a copy of the complaint, in part because it mentions this news organization. The Arkansas Securities Department released its signed settlement with Stephens Inc. to Arkansas Business minutes before a copy of the document was emailed to Stephens, and Stephens Inc. called that timing “evidence of the direct retaliatory actions” taken by Abshure and the ASD.

In a letter that Stephens also provided to Arkansas Business, Ethics Commission Director Graham F. Sloan said the commission had no authority to investigate alleged violations of state securities law but would investigate whether Abshure had violated ethics laws by using his official position to secure special privileges for himself.

The Ethics Commission said it had no closed cases in which Abshure had been a respondent.

The Complaint



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