Darien GOP Chair Says He Explained SEC Case to RTC

The Darien Republican Town Committee is standing behind Bob Bewkes, whom they elected chairman while knowing he had been cited on insider trading charges by federal authorities years before.

UPDATE, 2:07 p.m.:

Darien GOP Chairman Bob Bewkes says he's frustrated that under the terms of a settlement with the Securities and Exchange Commission he can't talk to the news media about the insider trading charges that were filed against him in 2003.

"When I agreed to that at the time, it never occurred to me that I might want to defend myself in public later," Bewkes said in an interview Friday afternoon.

Under the terms of the settlement, Bewkes and his father, E. Garrett "Garry" Bewkes Jr. paid fines and were banned from acting as financial advisors or trading stocks for five years. Neither father nor son were required to admit any guilt in the matter.

Unnamed S.E.C. officials involved in the Bewkes case told the New York Times that it was not a major case, described it as a quick decision (within minutes) on the son's part to take advantage of information he had just received from his father, and they noted that the father and son cooperated with authorities and offered to settle the case.

When the ban expired in 2009, Bob Bewkes said, he didn't reapply for permission to trade again. He is now a real estate agent.

Bewkes was selected to become a member of the Republican Town Committee in September 2010. During the RTC's selection process, he said, he was asked about the events that led up to the S.E.C. case against him, and he explained what happened and why he thought he would nevertheless be a good candidate for membership.

Bewkes said he told the committee that he's lived in Darien for all of his 56 years and knows lots of people in town. "I thought I could bring helpful fundraising leadership and outreach to the party, hopefully with a positive attitude."

In July 2011, after the top leadership of the Republican Town Committee resigned, several members asked Bewkes to run for chairman. He was elected to fill out the rest of the term. Another election is scheduled for the committee's meeting in March.

Bewkes said no one brought up to him the events of 2003 to 2004 at the time he was elected chairman. When he was running for election to that post, he said his main strengths as chairman would be to foster openness in the committee, "to make sure that everyone on the committee gets to have their say," and to keep the organization running smoothly.

One of he main tasks of the Republican Town Committee is to vet candidates for public office, helping the public to avoid candidates they might not want to elect because of the candidates' past histories.

Bewkes was asked whether or not he'd support someone as a candidate for public office if that person had a similar history of S.E.C. charges. He said that he and the committee would have to look into the circumstances, and if they were similar to his own, he could support that person for some elected positions—along with membership on the RTC—but probably not for a major office like first selectman.

He also pointed out that RTC decisions on endorsements and nominations are made by the whole committee, not just himself or himself and a few others.

ORIGINAL ARTICLE: "Darien GOP Chair Banned in 2004 from Finance Industry"

The entire was aware when Bob Bewkes was elected to head that body that he had been cited by federal authorities in 2003 on insider trading charges and had reached a civil settlement with them in 2004.

And when Bewkes first was being considered as a member of the RTC, "He was questioned directly about the matter during his interview and we were satisfied with his answers," John V. Boulton, vice chairman of the Darien RTC, said in a statement released on behalf of the committee.

In a brief telephone interview, Boulton said that when Bewkes put his name forward for the chairmanship of the RTC, that body as a whole, not just a committee or group within it, was aware of the matter and decided it shouldn't prevent Bewkes from the post.

Under the terms of the settlement, Bewkes agreed to a five-year ban from the securities industry, according to the U.S. Securities and Exchange Commission. He paid $137,306 in penalties, according to a statement released by the SEC on April 7, 2004.

What happened, according to the S.E.C.

According to the S.E.C., Bewkes' father, E. Garrett "Garry" Bewkes Jr., had called him at his Darien home one morning in Feb. 2, 2003, and told him that Interstate Bakeries Corp., where the father was on the board of directors, was in "lousy" financial shape, and suggested to his son that he sell any stock he had in it.

Within 10 minutes, according to the SEC, Bob Bewkes started doing just that. The S.E.C. judgment against him said that Bewkes, then a financial advisor at UBS PaineWebber in Stamford, "sold 16,230 shares of IBC stock held in the accounts of himself, his wife, his children, his children's nanny, his best friend, and several other clients." 

Nine days later, after IBC announced a downward revision of its earnings estimate, "the price of IBC stock fell from $13.64 per share to $10.22 per share."

Altogether, the S.E.C. estimated, Bewkes saved himself and others $67,517 by selling the stock before the company's problems were made public.

Investigation, citation

Bewkes' selling attracted the attention of the New York Stock Exchange, which opened an investigation, and that led to the S.E.C. citing both father and son.

In 2004 they proposed a civil settlement that the S.E.C. accepted in which they agreed to pay fines, give up any money gained from the early selling and accept other penalties. Neither of the Bewkeses admitted to wrongdoing.

The five-year ban has long since expired, and Bob Bewkes is entitled to reapply as a financial advisor. He now works as a realtor with Kelly & Associates in Darien.

A telephone message left at Bewkes home on Thursday was not returned.

According to Landon Thomas Jr., writing in the New York Times' business section: "Greed did not seem to be a motive. Robert Bewkes ultimately saved $67,517 in losses for himself and his clients, a relatively modest amount for a veteran stockbroker."

''People in these positions should know better,'' Mark K. Schoenfeld, then a top enforcement official in the S.E.C.'s New York office, told the Times reporter. ''It's a small amount and thus less graphic and venal, but it was still done with an intent to confer a benefit on the son.''

Republican Town Committee's response

The statement Boulton released on behalf of the Republican Town Committee also said:

"This past December, Bob's candidacy for re-election to the RTC was reviewed and recommended by an independent nominating committee, and was subsequently endorsed by the January 2012 Town Republican Caucus.

"Bob has honored the terms of the S.E.C. settlement and we consider the matter closed. Bob’s tenure as RTC Chairman has been marked by openness, integrity, and accountability. He has the RTC’s full support."

Correction: The first quote in the original article from the Darien Republican Town Committee statement about Bob Bewkes (beginning "He was questioned [...]" referred to considering Bewkes for membership in the RTC, not during his candidacy for the chairmanship.

BobbyC February 24, 2012 at 01:40 PM
Dave inside trading is not a mistake, it's unfair to others and against the law, in other words, HE'S A CROOK like many of the others and should be ban from holding a job like this. This only shows what Darien is made of.
BobbyC February 24, 2012 at 01:45 PM
This isn't Republican in-fighting, it's the law, your point of view shows what your also made of, doesn't look good to me. What Madoff did doesn't make what Bewkes did right, he must be a friend of yours, they should kick him out NOW!
sebastian dangerfield February 24, 2012 at 01:59 PM
I think obama smoked pot. as far as i know its illegal. bobby? should we kick him out? Or is doing illegal things ok, if you are a democrat?
sebastian dangerfield February 24, 2012 at 02:07 PM
dodd received a below market rate loan -- rangel cheated on his taxes and defrauded the govt clinton lies under oath --since when has politics become a place for saints? I think people make mistakes. Bobby has a black and white law. why, then do i think he probably doesnt care about democrats in office that actually affect him ?
William February 24, 2012 at 03:54 PM
Mr. Bewkes has a 'slam dunk' lawsuit against Patch on this story! Under terms of the SEC finding Mr. Bewkes could reapply and REGAIN his brokers license 5 years after the finding! -- If he so chooses!!!! He was NOT BANNED!!!! His Lic was suspended. Banned is FALSE! Blatantly FALSE!!!! --From the SEC statement: Pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act, that Respondent Bewkes be, and hereby is, barred from association with any broker, dealer, or investment adviser, with the right to reapply for association after five years to the appropriate self-regulatory organization, or if there is none, to the Commission.
William February 24, 2012 at 03:58 PM
Looks like the editor/headline writer/'kid' reporter took some liberties! (Fire the SOB)
David Gurliacci (Editor) February 24, 2012 at 04:07 PM
William, it's already in the story: "The five-year ban has long since expired, and Bob Bewkes is entitled to reapply as a financial advisor." A ban for five years is a ban. His license being suspended is a ban. If you didn't notice that, William, maybe others didn't notice it. I'll think about moving that higher up in the story.
jimbuchannan February 24, 2012 at 04:29 PM
Looks like the editor made a rookie mistake in HIS headline : "banned." (Maybe his desire to write (ck bio) trumped his lack of journalistic skills)
Christopher February 24, 2012 at 04:39 PM
Exaggerated headline. A classic rookie mistake & one that will cost him his job...or send him to J school for an introductory course in headlines! (This organs PUBLIC Ed. will have a field day!!)
David Gurliacci (Editor) February 24, 2012 at 05:01 PM
After my firing, maybe they'll hire me over at the New York Times: http://www.nytimes.com/2010/10/14/business/14rattner.html?ref=stevenrattner
Sean February 24, 2012 at 06:19 PM
Darien is a town with many high verbals, lawyers, folks in finance, and journalism. Your rather cavalier approach to headline writing is embarrassing. It would be a cold day in hell before the NYTIMES would hire you. Unless, of course, it's for janitorial duties.
Darien Taxpayer February 24, 2012 at 06:29 PM
How were this guy's answers "satisfactory", Mr. Boulton? He was barred from the securities industry for five years. Like the SEC federal enforcement official said, "''People in these positions should know better,'' and who told the Times reporter. ''It's a small amount and thus less graphic and venal, but it was still done with an intent to confer a benefit on the son.'' It sounds pretty sleazy to most people and why people don't trust politicians. The Republicans "should know better" too, and the fact they try and defend him makes them look even sleazier. What else might he be doing when there is no SEC oversight?
sebastian dangerfield February 24, 2012 at 10:32 PM
darien taxpayer--ill ask you as well--should we rid ourselves of all people involved in politics that have done things in the past? He didnt defraud the town. he didnt steal money. He sold stock thinking it would go down, when he had inside info. they didnt send him to jail ( a key thing)--- Now I dont condone his activities, or think they are excusable. But, do you think obama should be President if he took drugs? A fair question. (and remember, using drugs enriches drug dealers, who then go on to expand their businesses etc...so please dont say they are not the same crime. A crime is a crime----and your views on the president and lots of other pols, should be consistent.
dariennative February 25, 2012 at 02:20 PM
another story of the powerful getting caught doing bad things? i think republicans need to take a long look in the mirror if this is the best they can do. people have lost faith in the stock market because they think the game is rigged by insiders. It's a question of ethics in my opinion------whether he went to jail or not makes no difference. republicans should find at least one volunteer who doesn't have the questionable ethical history of mr. bewkes.
gator February 25, 2012 at 03:01 PM
People break the law all of the time; some get caught while others don't. If caught you pay the penalty. Mr. Bewkes paid the penalty; case now closed. It's when money and influence allows some to avoid the penalties that others have to pay where people get upset, i.e. Madoff who for many years avoided the scrutiny of the SEC. As to the reporting of the incident, it's appropriate given Mr. Bewkes position in the town. He exhibited bad judgement in the past, and this might be a sign of things to come.
Darien Taxpayer February 25, 2012 at 08:57 PM
I don't remember any reporting of this before so I doubt it was widely known. Setting aside the bad judgment of Mr. Bewkes, it's even more surprising that people would think it shouldn't prevent him from being chairman. It seems the republican party has no shortage of poor judgment.
Dennis Warner February 26, 2012 at 01:39 AM
I worked for Interstate Bakeries for 31 years. And when all of our problems started with ol ' Bewkes the company tried to blame the problems on the work force. I.E high cost for pensions and benefits. When in fact it was this a--hole that started the Matoff ball rolling. Good luck to the Republican party.
sebastian dangerfield February 26, 2012 at 02:47 AM
dennis try a different lie. he sold because the company was not doing well. if a guy sells stock it doesnt make the company do poorly. it already was. Come up with a more intelligent story.....
gator February 26, 2012 at 03:18 AM
Luca, He sold because his father tipped him off (illegally) as any broker or banker KNOWS with insider information. People regularly go to JAIL for this. The story is relevant because people that break the law - and insider trading is a flagrant violation - are either crooked at heart or are exercising terrible judgement. People with this low level of good judgement might best serve their community in ways other than running the GOP.
dariennative February 26, 2012 at 05:14 PM
gator makes a valid point---this is a huge story because it shows again how somebody in a prominent position thinks the rules don't apply to him. Bewkes wasn't just any ordinary working guy who owned stock, but was a broker in a well known company. Brokers are highly trained to know the line they are not supposed to cross, but according to the SEC published reports it only took him ten minutes after getting the inside info to cross it. He paid his penalty after the SEC caught him, but it says a lot about his ethics and poor judgment. The GOP should think twice about trying to defend that, and Bewkes should volunteer elsewhere.
sebastian dangerfield February 26, 2012 at 05:21 PM
Gator, dariennative... Thanks for the lessons. Dariennative..where should he volunteer? Should Obama resign because he smoked pot? Why didn't bewares go to jail? ( I'm guessing because the sec decided it wasn't serious enough...what do u think.... Please don't say you don't know since you appear to be into providing valuable (ha) insight. I'm guessing someone on the dtc has gotten a speeding ticket in their life. Speed is responsible for countless deaths on the road. Should they resign?
dariennative February 26, 2012 at 07:06 PM
luca, are you serious? maybe you are a member of the club, and it's easy for you to excuse any bad or illegal behavior by pointing to worse behavior. With the recent exposure, it's embarrassing for repubs to have the public perception a guy with a huge ethical cloud is running the GOP. what's just as bad or even worse is reading the weak statements by John Bolton and the party that try to defend him. maybe Bewkers can try teaching a class in ethics at the high school----even in darien, money isn't everything.
Teri February 26, 2012 at 11:47 PM
The only reason the Patch wrote about this is because the Darien Times first reported it last week after they saw a comment about Bewkes SEC enforcement action from one of my readers. The Patch editor has simply copied the Darien Times story (without credit) but at least they list more of the SEC settlement terms than the Hersam (New Canaan Republican) owned paper did. http://www.teribuhl.com/2012/02/16/new-canaan-patch-editor-plays-favs-for-rtc-chairman-ohora/ http://www.darientimes.com/news/darien-features/local-news/5002377-dariens-gop-leader-was-cited-by-sec.html Being 'barred from association' for five years is the same as a 5yr ban. I have covered wall street fraud for 5 years reporting for most major publications...we would never write his lic was suspended and the SEC or The Street doesn't consider it suspended. The Patch editor is correct when he wrote that sentence.
Teri February 26, 2012 at 11:49 PM
http://www.teribuhl.com/2012/02/23/ohoras-new-canaan-rtc-party-committee-or-private-piggy-bank/ You might find this story about New Canaan Republicans interesting
gator February 27, 2012 at 12:16 AM
We live in a country with laws - and a statute of limitation. Breaking the law carries with it penalties. Smoking a joint 25 years ago is a minor concern. Insider trading? As insider trading undermines the integrity of the stock market, the penalties are much bigger. Ånd, for a stock broker - as well as a man on a board of directors, it is equivalent to a lawyer lying to a judge. Depending on the lie the lawyer could go to jail, be disbarred or simply be held in contempt. In the Bewke's case the SEC banned him for five years. In the last month I've read of two that are now serving jail time from 5-11 years. Both Bewkes were very, very lucky. They were not innocent - and both knew exactly what they were doing. Insider trading is explained to bankers and brokers on day one, not day two or day three, The penalties are also explained starting with firing, along with potential financial penalties and jail time. Yet, some still do it. This goes a little further than an ethical lapse. As for the Bewkes family and their insider trading, the relatively small sum of the gain is just as big a question. Why? Ethics??? As for Dodd, I believe he did go to jail.
sebastian dangerfield February 27, 2012 at 02:45 AM
gator, darien native I asked a question. You guys too busy giving sermons and lectures on ethics? and then deciding which breach of laws are excusable? Why didnt bewkes go to jail?
gator February 27, 2012 at 01:31 PM
DAs are given latitude. My guess is that because of the amount involved, an admission of guilt and the political climate for these cases at the time and a good lawyer, the Bewkes were let off with a fine and a ban from the business for 5 years. This does not excuse their terrible judgement. But any first year law student could have told you this.
LoriAnnMay February 27, 2012 at 03:22 PM
It is surprising to me to see the lengths some people seem to go to try and justify wrongdoing. Maybe they are friends, I don't know. It is making the republican party look even worse, if that is even possible. All these reports just leave us with the impression that it is being run by very disreputable people in Darien and new canaan.
Darien Taxpayer February 27, 2012 at 07:01 PM
Wall Street Journal says FBI launching a new campaign: The FBI has a new spokesman. His name is Gordon Gekko. His message: insider trading is a serious crime. on.wsj.com/AF1mUL Anybody who tries to make excuses for those who have engaged in this is just as despicable. People have lost a lot of money to these crooks and they shouldn't be in any position of power-----and I'll bet most people feel the same way.
David Gurliacci (Editor) February 27, 2012 at 08:30 PM
Thank you, everyone, for your comments. This thread is now closed.


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