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SEC charges Lawson Financial CEO, underwriter's counsel with gatekeeper failures

Lawson Financial Corp. and founder and CEO Robert Lawson have agreed to certain penalties and disgorgement payments to settle SEC charges related to fraudulent municipal bond offerings.

Lawson Financial and its founder will make combined disgorgement payments of $200,000. Additionally, the company will pay a civil penalty of $200,000, while its founder will pay a penalty of $80,000.

The SEC order found that Lawson Financial failed in its role as a gatekeeper to conduct reasonable due diligence when underwriting bond offerings to purchase and renovate nursing homes and senior living facilities. The offerings were managed by Atlanta-based businessman Christopher Brogdon, who was later charged by the SEC with fraud and is facing a court order to repay $85 million to investors. Lawson Financial failed to ensure Brogdon and his related borrowers were in compliance with their continuing disclosure.

The SEC charged Robert Lawson and then-underwriter's counsel John Lynch Jr. with failing to conduct reasonable due diligence. Additionally, the SEC said Lynch hid the fact that he was not authorized to practice law at the time as represented to investors in the bond offering documents.

Lawson and his firm did not admit or deny the SEC's findings. The order also bars Lawson from the securities industry for three years.

Lynch agreed to a bifurcated settlement without admitting or denying the SEC's findings. He must pay nearly $45,000 and has been permanently suspended from appearing and practicing before the SEC as an attorney.