Securities Law

SEC alleges Nelson Mullins partner served as conduit in pay-to-play scheme

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A civil suit by the U.S. Securities and Exchange Commission alleges a partner at Nelson Mullins Riley & Scarborough served as a conduit in a pay-to-play scheme by State Street Bank and Trust Co.

The lawyer, Robert Crowe of Boston, is co-chair of Nelson Mullins’ government relations practice and a former co-chairman for finance of the Democratic National Committee. The SEC alleges Crowe helped State Street make campaign contributions to an Ohio official in exchange for public pension contracts, the Am Law Daily reports. A press release is here and the complaint is here (PDF).

Crowe is accused of filtering campaign contributions through his personal account and reimbursing other individuals for contributions made in their own names. The SEC says he sent a backdated invoice for purported mentoring services to cover a wire payment to his account for the campaign contributions. Nelson Mullins was unaware of the purported contract and never received any payments in connection with it, according to the SEC.

The campaign contributions were for Ohio’s then-deputy state treasurer, Amer Ahmad, the SEC says. Ahmad was sent to prison in August, according to this Chicago Tribune story.

Crowe joined Nelson Mullins in 2009 from the now shuttered law firm WolfBlock.

Crowe’s lawyer, Arthur McMahon III, told the Am Law Daily that the SEC allegations are “patently untrue.”

“Moreover, nothing the SEC has alleged would constitute securities fraud, a breach of the SEC’s pay-to-play rules or a violation of any other rule the SEC has authority to enforce,” McMahon said.

Nelson Mullins general counsel James Gray provided a statement to the Am Law Daily. “It is important to remember that the complaint filed by the Securities and Exchange Commission contains allegations against Mr. Crowe that have not yet been proven in court,” the statement said. “We have no information regarding his response to the allegations, nor would it be proper to comment on his defense to these charges.”

State Street says it cooperated in the investigation, and company management was unaware of such conduct. State Street agreed to pay $12 million to settle the suit without admitting the allegations. A former State Street employee agreed to pay about $274,000.

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