Litigation Release No. 16241 / August 4, 1999
SECURITIES AND EXCHANGE COMMISSION v. WILLIAM JAY RAMSEY, Civil Action No. 4:99cv303-WS (N.D. Fla.)
COMMISSION FILES AND SETTLES PAY-TO-PLAY
ENFORCEMENT ACTION - $10,000 PENALTY ORDERED
The Securities and Exchange Commission today announced the filing and settlement of an enforcement action against William Jay Ramsey, former board member of the Florida Housing Finance Agency, for failing to disclose his receipt of compensation in connection with selecting a brokerage firm for the Agency's bond business.
The complaint, filed in the Northern District of Florida, alleges the following: By early 1995, while a board member of the Florida Housing Finance Agency and chairman of the Agency's Professional Selection Committee, Ramsey secretly entered into an arrangement with a consultant working for Stephens Inc., a brokerage firm headquartered in Little Rock, Arkansas. The arrangement provided that Ramsey would receive $1,500 per month for a year. After receiving the first $1,500 payment under the arrangement, Ramsey twice voted to select Stephens for Agency bond business, without ever disclosing the arrangement or the payment he received to the Agency or investors in the Agency's bonds. Because the SEC's investigation began inquiring into the consultant's activities, no further payments were made to Ramsey under the arrangement. Ramsey's failure to disclose the arrangement, the payment, and the actual and potential conflicts of interest created thereby violated the antifraud provisions of the federal securities laws.
Without admitting or denying the allegations, Ramsey agreed to settle the action by (1) paying a $10,000 penalty, (2) disgorging the compensation he received plus prejudgment interest thereon, which totaled $2,190.03, and (3) consenting to the entry of an injunction prohibiting him from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
In a related, previously settled enforcement action, Stephens, without admitting or denying the findings, consented to the issuance of an administrative order that found, among other things, that Stephens secretly paid Ramsey and failed to disclose the actual and potential conflict of interest created thereby to the Agency and investors in the Agency's bonds. In the Matter of Stephens Inc., Exchange Act Release No. 40699 (Nov. 23, 1998). In that action, Stephens was ordered to cease and desist from violating:
- the antifraud provisions (Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder);
- the municipal broker-dealer fair-dealing and gratuity provisions (Section 15B(c)(1) of the Exchange Act, and Municipal Securities Rulemaking Board Rules G-17 and G-20); and
- the broker-dealer books and records provisions (Section 17(a)(1) of the Exchange Act, Exchange Act Rule 17a-3, and Municipal Securities Rulemaking Board Rule G-8).
The Commission's investigation concerning pay-to-play practices in Florida and Georgia continues.
