Robert Keenan
St. Bernard Financial Services Inc. of Russellville will pay a $25,000 fine to the Arkansas Securities Department for failing to properly supervise broker Steele Stephens, the broker whose cash payments to former state Treasurer Martha Shoffner resulted in her conviction on bribery charges.
The fine is result of a consent order (PDF), announced Wednesday, that the department entered against St. Bernard and its CEO, Robert Keenan Jr. It comes more than a year after the department filed a complaint against Keenan and St. Bernard to consider whether the company’s and Keenan’s state registrations should be suspended or revoked and whether fines should be levied against them.
As part of the order, the department dismissed with prejudice a portion of the complaint against Keenan individually.
In its order, the department said that until Dec. 1, 2012, St. Bernard’s written supervisory and compliance policy “failed to adequately address and prevent the use of non-St. Bernard’s email accounts to conduct securities business” by registered agents, including Stephens.
The order also said that the company’s policy didn’t provide for retention and archiving of securities business emails.
As a result, the order said, information contained in emails “concerning the suitability of securities sales proposed by Stephens to his client, the Arkansas treasurer’s office, was not available for the supervisory staff of St. Bernard to review.”
The department said the $25,000 fine “fully covers” commissions earned by St. Bernard for the trades in the department’s complaint.
Keenan had denied any wrongdoing, personally or by the firm, and said he and the firm “should not be held responsible for any falsehoods, lies or subterfuges, if any, of its agent, Stephens.”
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