UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
Securities Act of 1933
Release No. 7673 / April 29, 1999
Securities Exchange Act of 1934
Release No. 41345 / April 29, 1999
Administrative Proceeding File No. 3-9884
PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS INSTITUTED
AGAINST PRYOR, McCLENDON, COUNTS & COMPANY, INC., RAYMOND J.
McCLENDON, ALLEN W. COUNTS, AND THERESA A. STANFORD
The Securities and Exchange Commission today instituted
administrative and cease-and-desist proceedings against Pryor,
McClendon, Counts & Company, Inc. (PMC), a registered broker-
dealer, former PMC principal Raymond J. McClendon, and the former
investment officer for the City of Atlanta, Georgia, Theresa A.
Stanford, for violating the antifraud provisions of the federal
securities laws in connection with business PMC did with the City
of Atlanta. The instituted proceedings also charge PMC and a
current PMC principal, Allen W. Counts, with violating antifraud
provisions of the federal securities laws and Municipal
Securities Rulemaking Board (MSRB) Rule G-37 in connection with
campaign contributions to New York City officials.
The order instituting proceedings alleges that Stanford,
McClendon, and PMC violated the antifraud provisions of the
federal securities laws as follows: From at least March 1992
through April 1994, Stanford used her authority as the City of
Atlanta’s investment officer to steer to PMC approximately $9.8
billion in purchases and sales by the City of zero-coupon
securities issued by the United States Treasury, which are
referred to as "Separate Trading of Registered Interest and
Principal Securities" or STRIPS. The City’s STRIPS transactions
with PMC accounted for more than 90 percent of the City’s STRIPS
transactions during that period. Stanford virtually eliminated
PMC’s competition for the STRIPS business by concealing the
City’s STRIPS holdings from other broker-dealers. In that
period, Stanford, McClendon, and PMC also caused the City to turn
over the STRIPS portion of its securities portfolio more than
eight times, and PMC received approximately $15.3 million in
compensation from that activity. Throughout this period, PMC and
Stanford’s husband maintained a financial and business
relationship that was not disclosed to the City. That
relationship included a $30,000 payment that PMC made to
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
AGAINST PRYOR, McCLENDON, COUNTS & COMPANY, INC., RAYMOND J. McCLENDON, ALLEN W. COUNTS, AND
The Securities and Exchange Commission today instituted administrative and cease-and-desist
The instituted proceedings also charge PMC and a current PMC principal, Allen W. Counts, with
The order instituting proceedings alleges that Stanford, McClendon, and PMC violated the
ecurities" or STRIPS.
The City’s STRIPS transactions with PMC accounted for more than 90 percent of the City’s
Stanford virtually eliminated PMC’s competition for the STRIPS business by concealing the
That relationship included a $30,000 payment that PMC made to Stanford’s husband through a
In addition to the STRIPS trading scheme, the order alleges that McClendon and PMC violated
The order also alleges that Counts and PMC violated federal securities laws and/or MSRB rules
In 1994 and 1997, Counts and PMC made campaign contributions through conduits to two New York
In the two-year periods following each of those contributions, in violation of MSRB Rule
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