Missouri Secretary of State Jay Ashcroft is standing behind his decision to appoint a former executive from a company under investigation by the state to lead the agency that protects consumers from securities fraud.
Ashcroft, a Republican serving his first term as secretary of state, picked David Minnick to serve as commissioner of securities. The job puts Minnick in charge of the division responsible for protecting Missouri investors from fraud and ensuring that companies comply with state securities law.
Previously Minnick had, since 2004, served as general counsel and senior vice president of St. Louis-based Stifel Financial Corp. The company has been investigated by the securities division numerous times in recent years, including an investigation that is ongoing.
Critics of the appointment say it’s a conflict of interest for Minnick to be leading an investigation into his former employer. They also worry about the fact that more than half the securities division staff members under the previous secretary of state are no longer employed under Ashcroft, including three enforcement attorneys, the director of enforcement and the investigations manager.
Ashcroft says Minnick has his full support.
“David Minnick grew up outside Chillicothe on a farm and has lived in Missouri most of his life,” Ashcroft said in a statement released Monday. “He loves Missouri, and the citizens of this state need people like David to serve the public in state government. His reputation is excellent. He has integrity and is honest. He has a deep, real-life familiarity of the securities industry that will help the securities division improve how they conduct examinations and investigations.”
Contrary to the criticism, Ashcroft says Minnick’s role as general counsel for a company that has been subject to multiple investigations will help him in his new job. Ashcroft’s press release says the experience gave Minnick “an informed opinion on the division well before he accepted the position.”
He also noted Minnick’s earlier work as a county prosecutor, saying “he is returning to his roots, protecting people and holding offenders accountable.”
But Missouri Democrats have continued to pan Ashcroft’s decision, noting that even the press release announcing Minnick’s hire and laying out his professional experience left out that he worked for Stifel for the last 12 years. A group of Democrats in the Missouri House filed legislation last week that would prohibit the secretary of state from appointing an individual to lead the securities division if that person previously had been employed by a company that has been under state or federal investigation within one year.
“Missourians know a conflict of interest when they see one,” said state Rep. Deb Lavender, a St. Louis County Democrat, “and this appointment doesn’t pass the laugh test.”
State Rep. Greg Razer, a Kansas City Democrat, called Minnick’s appointment “blatant corruption.”
“Appointing someone to lead an investigation into their firm of 10-plus years is simply indefensible and needs to be corrected immediately,” he said.
Ashcroft’s press release quotes Donald Cupps, a Democrat and member of the University of Missouri Board of Curators, who says he’s known Minnick since 1973.
“I would never question David’s integrity or honesty,” said Cupps, an attorney from Cassville. “I have no concerns that David as securities commissioner will handle any real or perceived conflict with his previous employers appropriately.”