April 5, 2017

The Securities and Exchange Commission today announced that Lawson Financial Corporation an Arizona-based brokerage firm, its CEO, Robert Lawson and its former underwriter’s counsel John T. Lynch Jr. have agreed to settle charges related to municipal bond offerings they were underwriting that turned out to be fraudulent. The SEC’s order finds that Lawson Financial Corporation failed in its role as a gatekeeper to conduct reasonable due diligence when underwriting bond offerings to purchase and renovate nursing homes and senior living facilities.  The offerings were managed by Atlanta-based businessman Christopher F. Brogdon, who was later charged by the SEC with fraud and faces a court order to repay $85 million to investors.  Lawson Financial failed to ensure Brogdon and his related borrowers were in compliance with their continuing disclosure undertakings as required by Rule 15c2-12, which generally prohibits underwriters from purchasing or selling municipal securities unless the issuer or obligated person has committed to providing continuing disclosure information, such as annual financial materials and operating data. Lawson Financial’s founder and CEO Lawson and then-underwriter’s counsel Lynch Jr. are charged with failing to conduct reasonable due diligence, and Lynch also failed to disclose that he was not actually authorized to practice law at the time as represented to investors in the bond offering documents. SEC

Tagged in: Misrepresentations, Securities Fraud,