Robert Keenan, the chief executive at St. Bernard Financial Services Inc. (“St. Bernard”), was elected to the Board of the Financial Industry Regulatory Authority, Inc. (“FINRA”) as a small-firm representative in August 2013. Recently, in June 2013, federal prosecutors indicted Arkansas treasurer, Martha Shoffner, for allegedly receiving $36,000 from a St. Bernard broker in exchange for the State of Arkansas’s investment business. Pursuant to media reports, Shoffner’s office purchased $1.69 billion in bonds from St. Bernard, and from a different broker-dealer, between July 2008 and March 2013. It was further reported that FBI investigators taped Shoffner accepting a $6,000 payment from the St. Bernard broker, who also, on at least two occasions delivered additional cash payments to Shoffner hidden inside pie boxes. According to a statement made by Arkansas securities commissioner, Heath Abshure, “typically the treasurer’s office had held bonds to maturity, but then all of a sudden started selling prior to maturity . . . Replacement bonds all started going to [Mr.] Keenan’s firm . . . That’s what got the state’s attention.” It will be interesting to see what action, if any, FINRA takes regarding Keenan’s board seat due to his affiliation with St. Bernard and the bribery scandal.
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