Robert Warren Lawson, of Phoenix, Arizona, founder of Lawson Financial Corporation, has been permanently barred by the Securities and Exchange Commission (SEC) from engaging in securities sales or investment advisory services, or otherwise associating with any investment adviser or broker, according to an SEC Order containing findings that he committed securities fraud. In the Matter of Lawson Financial Corporation, et al., Administrative Proceeding File No. 3-17901 (Apr. 5, 2017).
According to the Order, between 2010 and 2014, Lawson Financial Corporation was the underwriter for thirteen fraudulent Brogdon Bond offerings, which accumulated at least $87,000,000.00 in funds to finance the United States based healthcare projects of Christopher Brogdon. Lawson Financial Corporation reportedly sold the bonds to broker-dealers as well as its own retail investors.
The Order stated that moneys raised from the offerings were supposed to be used to acquire and renovate a facility for the benefit of one of Brogdon’s borrowers. Apparently, Brogdon neglected to make sure that the borrower complied with duties to report financial information to the Municipal Securities Rulemaking board (MSRB); critically, the borrowers which Brogdon controlled made representations within the offering documents that it never failed to be in compliance with disclosure undertakings relating to municipal securities. SEC found that the representations in that regard were misleading based on the borrowers omitting from investors that the borrowers Brogdon controlled repeatedly failed to comply with securities disclosure undertakings.
Since Lawson Financial Corporation was the lead underwriter, SEC concluded that Lawson and the firm’s investment banker failed to perform due diligence in the Brogdon bond offerings. Consequently, SEC found that Lawson and his firm failed to have an adequate basis for concluding that statements in the offering documents were truthful and that borrowers which Brogdon controlled had complied with regulatory disclosure duties. Those due diligence failures, according to the SEC, led investors to be deprived of material information concerning the offerings, enabling Brogdon to continue committing fraud.
SEC held that Lawson Financial Corporation committed willful violations of Securities Act of 1933 Sections 17(a)(2) and 17(a)(3), as well as Securities Exchange Act of 1934 Section 15(c)(2) and SEC Rule 15c2-12. Moreover, SEC found Lawson to have deliberately committed violations of Securities Act of 1933 Sections 17(a)(2) and 17(a)(3) in addition to aiding and abetting the firm’s violation of Securities Exchange Act of 1934 Section 15(c)(2) and SEC Rule 15c2-12.
Lawson has been named in a customer initiated investment related arbitration claim on January 12, 2017, wherein the customer requested $1,285,000.00 in damages based upon allegations that Lawson effected unsuitable municipal debt transactions in the customer’s investment portfolio. Financial Industry Regulatory Authority (FINRA) Arbitration No. 16-03725 (Jan. 12, 2017).
According to FINRA Public Disclosure, another customer brought an investment related arbitration claim on December 14, 2016, requesting $20,000.00 in damages based upon allegations that municipal bond investments had been misrepresented.
Lawson’s registration with Lawson Financial Corporation was terminated on January 31, 2017 – the same day that FINRA expelled the firm. Lawson has been barred by FINRA in all capacities. Department of Enforcement v. Lawson, Disciplinary Proceeding No. 2014043854401 (Jan. 31, 2017).
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