WASHINGTON — The Securities and Exchange Commission announced Wednesday that it has settled its civil litigation against Robert Bradbury, the former chairman and chief executive officer of the now defunct underwriting firm Dolphin & Bradbury Inc., and barred him from the securities markets.
The announcement comes just before Bradbury is to be sentenced Monday on related criminal charges tied to his selling unsuitably risky notes to four Philadelphia-area school districts without disclosing the risks.
Bradbury pleaded guilty in March in a federal court in Pennsylvania to one criminal count of securities fraud related to the selling of the notes, which were issued to finance a failed golf course and caused the school districts to lose more than $10 million.
The settlement with the SEC comes after the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia on Nov. 30 issued a final judgment in the SEC’s case against Bradbury and his firm that requires the former underwriter and his wife Margaret to disgorge $3.41 million of ill-gotten gains plus $1.73 million of prejudgment interest.
But those funds were determined to have been already paid in a settlement of charges that Bradbury and his wife reached with the four school districts — North Penn School District, Boyertown Area School District, Perkiomen Valley School District and Red Lion Area School District — to end litigation in a state court. The school districts had filed lawsuits against the former underwriter and other transaction participants that were later consolidated. The settlement of that litigation required Bradbury and his wife to pay more than $5 million to the districts.
The federal court in Pennsylvania permanently enjoined Bradbury and his firm from future securities law and Municipal Securities Rulemaking Board rule violations and barred him from serving as a director in a public corporation.
But the SEC Wednesday went further than the Nov. 30 order by the federal court by permanently barring Bradbury from associating with any broker, dealer or municipal securities dealer and revoking the SEC registration of Dolphin & Bradbury.
Though the firm has not done business in several years, its registration has yet to be revoked, SEC officials said.
From March 1999 through August 2004, Bradbury, who was financial adviser to the school districts, underwrote and sold them unrated bond anticipation notes for the Whitetail golf course, a speculative project located in Franklin County, Pa., without disclosing the risks the notes posed.
Pennsylvania limits school district investments to certain conservative categories of investments. They may only own municipal securities backed by the full faith and credit of the state or a political subdivision or agency.
