EXCLUSIVE: FINRA Sanctions Teneo, Firm Connected To The Clintons
A consulting firm with close and controversial ties to the Clintons was recently sanctioned by the Financial Industry Regulatory Agency (FINRA) for failing to properly handle electronic communications, documents reviewed by The Daily Caller show.
Teneo Securities was censured and forced to pay a $17,500 fine for the infraction, which was settled on Sept. 7.
That’s according to a broker check report filed on the firm, which is a subsidiary of Teneo Holdings, a consulting firm founded by longtime Bill Clinton aide Doug Band and a former Hillary Clinton campaign financier named Declan Kelly.
Bill Clinton was named honorary chairman of Teneo Holdings in 2011. He stood to earn $3.5 million in that role but gave most of it back because of the controversy that later erupted around the company, which consults corporations on merger and acquisitions, securities placements and communications strategies.
The sanction stems from Teneo Securities’ management and auditing of its electronic correspondence. FINRA and the Securities Exchange Commission impose strict rules regarding records management for firms that trade securities.
From June 2011 through September 2014, Teneo “failed to ensure the review was conducted within those parameters by testing the consultant’s review or obtaining documentation from the consultant evidencing the review,” the report reads.
The New York City-based company also failed to have an audit system in place “to ensure that the consultant was conducting a review of the firm’s electronic correspondence.” Teneo also failed to provide its third-party consultant, which is unnamed in the FINRA report, with access to its electronic communications from Aug. 2013 through Sept. 2014.
“As a result, the firm failed to ensure that any contemporaneous review of electronic communications was conducted during this time period,” the report states.
In a statement from Teneo in the report, the firm said that it recognized the issues flagged by FINRA and began remediating them last November. The company did not respond to The Daily Caller’s request for comment.
The FINRA report also provides a clearer timeline of when Teneo was established.
Teneo Holdings’ start date has been widely reported to be June 2011. But records filed with FINRA, the Securities and Exchange Commission and with several different states show that the company was established earlier than that, at least on paper.
The broker check report shows that Teneo Securities was registered in Delaware in July 2009. And Teneo Holdings established a relationship with Teneo Securities in Oct. 2010 and “direct[s] the management or policies of the firm,” according to the FINRA report.
Those start dates raise questions about potential conflicts of interest because co-founder Declan Kelly worked at the State Department until May 2011. In Sept. 2009 he was appointed by Hillary Clinton to the office of special envoy to Northern Ireland at State. Prior to that, Kelly helped raise millions for Clinton’s Senate and presidential campaigns.
The timeline is important because Band regularly sought favors and access to Clinton and the State Department on behalf firms that paid Teneo for consulting work.
One company that stands out in particular is Dow Chemical.
Band reached out to Clinton and her deputy chief of staff, Huma Abedin, from 2009 through 2011 to obtain access for Dow’s CEO, Andrew Liveris. (RELATED: Emails Reveal Clinton’s ‘Sleazy’ Relationship With Chemical Maker)
A recent Daily Caller investigation showed that in Oct. 2010, Band pestered Clinton’s deputy chief of staff, Huma Abedin, over a letter that Liveris gave Clinton that he wanted her to give to India’s prime minister at the time. Other State Department emails have showed that Band asked Abedin “to show [Liveris] love” at a diplomatic function in July 2009.
Dow paid Teneo $2.8 million in 2011 and $16 million in 2012 for its consulting work. The chemical manufacturer had a longstanding consulting relationship with Kelly prior to its hiring of Teneo.
Teneo was a source of angst within the Clinton Foundation, emails released in the hack of Clinton campaign manager John Podesta’s email account show.
In Nov. 2010, after Chelsea Clinton took a bigger role at the Clinton Foundation, she Clinton sent numerous emails to other Clinton Foundation officials calling out Band and Kelly for “hustling” business at Clinton Foundation functions. (RELATED: Chelsea Clinton Accused Bill Clinton Aide Of ‘Hustling’ Business For Consulting Firm)
Clinton also alleged that Justin Cooper, another Bill Clinton aide who worked at Teneo, planted spyware on various Clinton Foundation employees’ computers.
Band pushed back against some of those allegations, telling the Clinton Foundation top brass that Chelsea used money from the organization to help pay for part of her $3 million wedding. Band also alleged in an internal memo that Chelsea’s husband, hedge fund operator Marc Mezvinsky, used a Clinton Foundation fundraiser to meet potential investors in his hedge fund. (RELATED: Doug Band Accused Chelsea Clinton Of Using Clinton Foundation Funds To Pay For Wedding)
This article initially referred to FINRA as a federal agency. It is a private corporation that has regulatory oversight of various securities markets.