September 9, 2016

A subsidiary of Oklahoma-based BOK Financial Corporation will pay more than $1.6 million to settle charges that it concealed numerous problems and red flags from investors in municipal bond offerings to purchase and renovate senior living facilities.  The SEC also filed a complaint in federal court against a former vice president at BOK, Marrien Neilson, who allegedly was chiefly responsible for the failures of the bank’s corporate trust department while overseeing what turned out to be fraudulent bond offerings managed by Christopher F. Brogdon.  According to the SEC’s order, BOK failed in its gatekeeper role as indenture trustee and dissemination agent for Brogdon’s bond offerings.  BOK and Neilson became aware that Brogdon was withdrawing money from reserve funds for the bond offerings and failing to replenish them and that he had failed to file annual financial statements for the offerings.  BOK and Neilson also knew that the nursing home facilities serving as collateral for one of the offerings had been closed for years.  But Neilson allegedly warned others that disclosing these issues could impair future business and fees from Brogdon, upset bondholders, and cause regulatory issues for bond underwriters.  Therefore, BOK did not inform bondholders as required.  SEC

Tagged in: Financial and Investment Fraud, Securities Fraud,