Democratic Party chairman calls for resignation of Missouri fraud watchdog

Missouri Democrats are calling on Secretary of State Jay Ashcroft to withdraw his pick to lead the agency tasked with protecting consumers from securities fraud over his ties to a company under investigation by the state.

Ashcroft, a Republican who began his first term last week, appointed David Minnick to serve as his commissioner of securities, a job that puts him in charge of the division responsible for protecting Missouri investors from fraud and ensuring that companies comply with state securities law.

Before taking the job, Minnick was general counsel and senior vice president of St. Louis-based Stifel Financial Corp. The company is currently under investigation by the agency Minnick now leads, and since 2010 has been investigated by the securities division at least three times.

“Secretary Ashcroft should withdraw this appointment immediately and institute a strict policy against appointing individuals with clear conflicts of interest before the people’s trust in his office is eroded any further,” said Missouri Democratic Party Chairman Stephen Webber.

Webber noted that in 2011, Stifel was also sued by the federal Securities and Exchange Commission for allegedly defrauding five Wisconsin school districts in 2006. And despite more than a decade with Stifel, the press release from Ashcroft announcing Minnick’s hire never made mention of his role with the company.

Aschroft’s spokeswoman declined to comment.

In addition to hiring Minnick, Ashcroft is catching flak for laying off longtime staff in the securities division. According to one former staff member, 12 security division employees were let go by Ashcroft. Only 10 were kept on.

Ashcroft’s spokeswoman declined to comment on personnel matters except to say that staff turnover “is not out of the ordinary in any way.”

This story was originally published January 17, 2017 at 1:38 PM with the headline "Democratic Party chairman calls for resignation of Missouri fraud watchdog."