The Securities and Exchange Commission (SEC) charged Dale M. Walker, the former County Manager of Macon-Bibb County, Georgia, with misleading three Macon-Bibb County public pension fund boards in connection with their selection of an investment adviser to manage over $400 million of pension fund assets.
The regulator alleges that the county manager improperly provided an unfair competitive advantage to one investment adviser due to his romantic interest in an individual associated with the adviser. According to the SEC’s complaint, Walker provided the confidential proposals of other investment adviser candidates to the adviser and asked the associated individual to analyze and rank the candidates. The completed analysis ranked the adviser with whom the individual was associated first above all other applicants.
According to the SEC, the county manager then attached the analysis to his memo recommending the adviser to the three pension fund boards, falsely representing that he prepared the analysis. Neither the adviser nor Walker disclosed the conflict of interest inherent in the adviser’s preparation of those materials. Each of the pension fund boards followed the county manager’s recommendation and selected the adviser as the investment adviser for their respective pension funds.Without admitting or denying the allegations in the complaint, Walker consented to the entry of a final judgment permanently enjoining him from violating the antifraud provision of Section 206(2) of the Investment Advisers Act of 1940 and ordering him to pay a $10,000 civil penalty. The final judgment further enjoins him from participating on behalf of a government entity in the decision to select or retain an investment adviser or broker-dealer, any involvement with managing any public pensions or making investment recommendations to such entities, and from participating in the selection of underwriters or municipal advisers for any offering of municipal securities.
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