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)

Signed by Knight on Nov. 15, the 15-page complaint alleges that “Commissioner Abshure is not allowed to donate funds due to the State to his favorite charities,” although he did so in a $150,000 settlement with Little Rock bond house Crews & Associates in July and in two much smaller orders that were part of multi-state settlements.

In all three cases, contributions in lieu of fines were paid to NASAA, the national association of which Abshure was president from September 2012 to October 2013.

Stephens suggested that bringing money into NASAA’s coffers “strengthened the Securities Commissioner’s professional resume and will almost certainly make him a more attractive candidate for future jobs in the public or private sectors of the securities industry.”

Abshure, in defending his actions, pointed to the penalties section of the Arkansas Securities Act, which says that “[n]othing in this section shall prohibit or restrict the informal disposition of a proceeding or allegations … in lieu of a formal or informal hearing … or in lieu of the sanctions authorized by this section.”

Abshure said settlements involving third-party contributions are just the sort of “informal disposition … in lieu of the sanctions authorized” that sentence contemplates.

But Knight, in the complaint and in an interview, pointed to another section of the Securities Act that says “all fines … or moneys collected in lieu of a fine… shall be deposited as special revenues into the State Treasury” and credited to a special fund for investor education.

“If you accept [Abshure’s] position, then he would be entitled to take all of the money that he collects on behalf of the state as settlements and do anything he wants with it,” Knight said last week. “He could put it in his pocket; he could give it to his friends. That just can’t be the law.”

Abshure said he offered to allow Stephens Inc. to make a contribution in lieu of a fine because other regulated entities have preferred such a remedy.

“Some companies want the ability to say, ‘Yeah, we have this consent order, we got a cease-and-desist, they had an expert come in, but we didn’t get fined,” Abshure said.

Crews & Associates, he said, was in that category when it worked with the department to settle the problem-plagued bonds issued by Bamco Gas LLC.

“Crews negotiated to recognize a charitable contribution and maybe not levy a fine,” Abshure said. “I said, ‘If you want to do that, you can.’”

Rush Harding, CEO of Crews & Associates, declined to comment for this article.

 

 

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