Former Chicago-Area Mayor Settles SEC `Pay-to-Play’ Allegations

Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...

By Phyllis Diamond

The former mayor of Markham, Ill., Dec. 1 settled SEC allegations that he accepted a $75,000 bribe related to the city’s $5.5 million municipal bond offering in 2012.

Ex-mayor David Webb Jr. allegedly solicited the payment from a construction contractor based on promises to steer a multi-million dollar construction project, to be paid for with bond proceeds, the contractor’s way, the Securities and Exchange Commission said.

A month later, at a city council meeting to discuss the proposed deal, Webb was asked by a woman present about the possibility bond proceeds would be used improperly. Webb assured the city council that “I don’t make deals,” even though he had solicited and accepted the bribe, the SEC said in a complaint filed in the U.S. District Court for the Northern District of Illinois. Later, at the same meeting, the city council approved the issuance of the bonds, the SEC said.

In the settlement, Webb agreed to be barred from future violations of federal securities laws and from participating in muni bond offerings. The court will determine the amount of any disgorgement and/or penalties, the agency said.

Webb also has been indicted on related criminal charges. His attorney couldn’t be identified for comment.

The SEC case is SEC v. Webb , N.D. Ill., 1:17-cv-8685, 12/1/17 . The criminal case is United States v. Webb , N.D. Ill., No. 17-cr-656, 11/30/17 .

To contact the reporter on this story: Phyllis Diamond in Washington at pdiamond@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Securities & Capital Markets on Bloomberg Law