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SEC & DOJ Prosecutions

Muni-Bond Advisor and Relevant Personnel Charged for Conflict of Interest; Settlement Achieved

In the Matter of Central States Capital Markets, LLC; Mark R. Detter; David K. Malone; and John D. Stepp, Respondents

  • 2016
  • 437,328

Respondents – a Kansas-based municipal advisor, its CEO, and two employees – arranged for a client’s bond offerings to be underwritten by an affiliated broker-dealer. All three of the individual respondents also worked for the b-d as registered representatives. This affiliation/conflict was not disclosed, and thus regarded as a breach of fiduciary duty. This was the SEC’s first case enforcing the fiduciary duty for municipal advisors created by the Dodd-Frank Act of 2010.

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