Former municipal advisor Porter Bingham will plead guilty to one count of fraud as part of an agreement with federal prosecutors.
“He will be pleading to one count, with a recommendation in the lower 25% of sentencing guidelines,” said Bingham’s attorney, Philip Hearn of the Jackson, Mississippi, Hearn Law firm. “Federal sentencing guidelines show a range of 0-13 months.”
The change of plea hearing is set for Thursday in a federal court in Mississippi. A guilty plea will leave only sentencing before the Department of Justice can close the book on this case that dates back to March 2019. Bingham faced not only criminal but also civil charges brought by the Securities and Exchange Commission in connection with a 2015 bond offering by the city of Rolling Fork, Mississippi.
Bloomberg
Bingham was a principal at Atlanta-based Malachi Financial Products, acting as municipal advisor for the city on a $1.1 million offering when he fraudulently billed Rolling Fork for $33,000 in addition to the $22,000 authorized in the firm’s contract with the city, a federal grand jury alleged in the 2019 indictment.
Bingham had settled SEC charges connected to the same conduct in July 2018, and agreed to pay a combined $75,000 in civil penalties and disgorge $33,000 plus $2,858 in prejudgment interest. The SEC also barred Bingham from the industry by administrative order.
The SEC’s case charged Bingham with violating his fiduciary duty to the city by the fraud and by failing to disclose a financially beneficial personal relationship he had with an employee of the broker-dealer firm underwriting the deal. That employee, Anthony Stovall, agreed to serve a six-month suspension and pay $20,000 to settle SEC charges against him.
Bingham’s case was considered significant by securities lawyers because it demonstrated the seriousness of both civil and criminal authorities in holding municipal advisors accountable for their conduct. Municipal advisors have only been formally regulated since the passage of the Dodd-Frank Act, though the criminal wire fraud, bank fraud, and money laundering charges brought against Bingham were already set in law prior to that.