Tulsa bankers fined for mishandling muni bond relationship
Three current or former institution-affiliated parties of BOKF, N.A., Tulsa, Oklahoma, have been issued personal civil money penalty orders by the OCC.
- Mary Patricia Campbell, VP, relationship manager, wealth management department, order to cease and desist and to pay a $2,500 CMP.
- Terri Lynn Pulley, VP, relationship manager, wealth management department, order to cease and desist and to pay a $2,500 CMP.
- Cyndi Sue Wilkinson former svp and regional manager, Tulsa trust office, order of prohibition and and for a CMP of $25,000.
With regard to securities issued on behalf of corporate borrowers all controlled by or related to a single individual, Campbell and Pulley were found to have:
- Permitted the use of Bond Debt Service Reserves by the borrower without establishing a plan to replenish the Debt Service Reserve accounts as required by the terms of the individual bonds;
- Failed to issue contractually required Notices regarding:
- distributions from Bond Debt Services Reserves;
- the occurrence of defined Events of Default by Borrowers pursuant to the Controlling Documents;
- borrower non-compliance with financial reporting requirements to owners of the shares of the municipal securities (“Bondholders”) or the “Disclosure Representative” for the Bondholders identified within the Controlling Documents.
- Failed to investigate and ensure compliance with Pledged Revenue Requirements within the Controlling Documents;
- Failed to comply with required reporting requirements using the Municipal Securities Rulemaking Board website, Electronic Municipal Market Access (EMMA);
- Failed to issue required Notices to the borrower of an Event of Default, as defined within the Controlling Documents, and demanding that the borrower cure the default, thereby failing to preserve and protect the rights of the Bondholders to take any action provided for within the Controlling Documents; and
- Authorized payment of Trustee fees to the Bank from Bond Debt Service Reserve accounts despite the fact that the use of such funds for that purpose was not authorized under the Controlling Documents
The OCC found that with regard to securities issued on behalf of corporate borrowers all controlled by or related to a single individua, Wilkinson failed to:
- adequately supervise Bank employees within the Department, despite having direct supervisory responsibility for those employees;
- take appropriate action upon receiving notice that employees, including those she directly supervised, engaged in violations of law and unsafe or unsound practices ; and
- notify Bank management that the administration of certain accounts was in violation of relevant laws, regulations, Bank policy, and governing documents.