U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23998 / December 1, 2017
Securities and Exchange Commission v. David Webb, Jr., Civil Action No. 17-8685 (N.D. Ill., filed December 1, 2017)
SEC Charges Former Mayor in Muni Bond Pay-To-Play Scheme
The Securities and Exchange Commission today announced that David Webb, Jr., the former mayor of Markham, Illinois, has agreed to partially settle fraud charges related to a $5.5 million 2012 municipal bond offering by the city.
In a complaint filed today in the U.S. District Court for the Northern District of Illinois, the SEC alleges that Webb engaged in a pay-to-play scheme by soliciting and receiving a $75,000 bribe from a construction contractor. According to the complaint, in exchange for the bribe, Webb promised the contractor that he would steer a multi-million-dollar city construction project, to be paid for with bond proceeds, to the contractor. At a Markham City Council meeting one month later, Webb responded to a question about the potential improper use of bond proceeds by assuring the City Council that he did not "make deals." Webb gave these assurances despite the fact that he had recently solicited and received the bribe.
The SEC's complaint alleges that Webb violated Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and Section 17(a)(1) of the Securities Act of 1933. Webb agreed to partially settle the SEC's charges by agreeing to be permanently enjoined from future violations of Section 10(b) of the Exchange Act and Section 17(a) of the Securities Act and to be barred from participating in future municipal bond offerings. A federal judge will determine the amount of disgorgement and penalties, if any, to be imposed. The settlement is subject to court approval.
The SEC's investigation was conducted by Michael Mueller of the Chicago Regional Office and supervised by Brian Fagel of the Public Finance Abuse Unit. The SEC appreciates the assistance of the U.S. Attorney's Office for the Northern District of Illinois and the Federal Bureau of Investigation.
