In its complaint, the US Securities and Exchange Commission has submitted a civil junctive action accusing Malachi Financial Products, Inc. and its principal Porter B. Bingham, of municipal bank fraud targeting Rolling Fork, Mississippi. According to the regulator, Malachi and Bingham charged the city too much for municipal advisory services involving a muni bond offering from October 2015.
Rolling Fork had hired Malachi in the capacity of municipal adviser in 2015 because of a proposed bond offering to pay for a number of improvement projects in the city. The SEC contends that after the closing of the offering, the firm and its principal submitted two invoices to the bond trustee, one—for $33,000—was for services that were never rendered and had never been authorized by the Mississippi city. The other, for $22K, was in line with what Malachi and Rolling Fork had agreed upon.
Bingham purportedly did not disclose to Rolling Fork that he had received $2,500 from Anthony Stovall, who worked for Bonwick Capital Partners. LLC, prior to Malachi recommending to the city that it retain Stovall’s firm as an underwriter for the bond offering. Rolling Fork went on to hire the underwriting firm because of the recommendation.