Gwen Moritz

Motivating Factors

Gwen Moritz Editor's Note

Motivating Factors
The showdown between Arkansas Securities Commissioner Heath Abshure and Stephens Inc. left some questions unanswered. (Jason Burt)

My high school journalism teacher taught me about five Ws and an H — who, what, when, where, why and how. Approximately 1,000 years later, I’ve concluded that that fifth W is the most problematic.

It’s relatively easy to determine who did what, when and where, and it’s generally possible to determine how it was done. But the question of why can be devilishly hard to pin down unless the first W decides to explain — and even then, I regret to report, there’s no guarantee that the explanation is true. All I can do is report people’s explanations fairly and let readers draw their own conclusions.

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Sometimes the question of why — the motive — is everything. Consider the case of Oscar Pistorius, South African amputee athlete and murder suspect: Who, what, when, where and how are not in dispute, but his explanation for why he shot his girlfriend to death and the prosecutor’s couldn’t be more different, and they can’t both be right. Determining the why in that case means the difference between convicting a man who made a negligent mistake and letting a hot-blooded killer go free.

In a local case of less infamy, Stephens Inc. and state Securities Commissioner Heath Abshure have made declarative — and damning — statements about each other’s motives. Stephens, through its general counsel, David Knight, complained to the Arkansas Ethics Commission that the company’s top state regulator had allowed certain other companies to make charitable contributions rather than pay fines in order to burnish his own reputation among his peers. Abshure countered that Stephens Inc. had decided to attack him personally and publicly because he dared to hold the state’s largest investment firm accountable for management failures that left individual investors vulnerable.

In this case, it’s technically possible that both could be right. Abshure could have been selfishly motivated when he reached an agreement under which Crews & Associates made a $150,000 contribution to the North American Securities Administrators Association, of which Abshure was president at the time. And Stephens Inc. — which chose to pay a straight-up fine of $25,000 rather than accept Abshure’s offer to make a similar contribution in lieu of a fine — could have been motivated by a desire to punish Abshure. The motives they assign to each other aren’t mutually exclusive.

It’s also possible that Abshure’s explanation for his own behavior — to give cooperative companies a suitable punishment less harsh than a fine — is true, and that Knight and his colleagues at Stephens truly felt that Abshure was unethical in directing someone else’s money to NASAA. Their own “why” answers aren’t mutually exclusive either.

The Arkansas Ethics Commission late last month cleared Abshure of any ethics violations. Unlike the judge in the Pistorius case, the Ethics Commission didn’t have to decide why Abshure approved the donations. Instead, it merely looked at what he did, compared it with the Arkansas Securities Act and concluded that Abshure had not overstepped his authority. It also concluded that (regardless of what Abshure may or may not have hoped) directing the donations to NASAA did not confer any undue benefit on the securities commissioner.

Knight, the Stephens Inc. lawyer, said the Ethics Commission’s conclusions underscore the need for changes in state securities law. Stephens has offered suggestions as to what those changes should be to the state Legislature’s Joint Performance Review Committee, which held two hearings on Stephens’ allegations against Abshure.

I attended both, and what I found most curious was the legislators’ display of almost perfect ignorance of what Abshure and his department do. Some were shocked by the longstanding administrative hearing system under which Abshure acts as hearing officer for complaints brought by his own staff, even though this is common to several of our state’s regulatory agencies (and in many other states). Rep. Nate Bell knowingly compared Abshure and his consent orders — formal, public documents reached by agreement with the regulated entities — with a policeman letting a drunk driver off the hook in exchange for a payment by the side of the road. (And yet the Ethics Commission couldn’t detect even a smidgen of unethical behavior on Abshure’s part.)

Not one committee member — not one who spoke, at any rate — seemed to want to truly understand the issues, although several did lecture Abshure pretty sternly. Now why would legislators who had never before displayed the slightest curiosity about the state Securities Department be so eager to deliver public tongue-lashings to its director because of a complaint filed by Stephens Inc.? I guess we’ll just never know the answer to that why question.

Email Gwen Moritz, editor of Arkansas Business, at