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Texas financial advisor agrees to pay $450,000 in penalties

By Ashley Perry | Oct 13, 2014

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Texas Attorney General Greg Abbott | The state of Texas

Texas Attorney General Greg Abbott reached a settlement on Friday with R. Craig Rathmann and his firm, Rathmann & Associates L.P., over anti-trust allegations that resulted in Houston-area municipal utility districts paying inflated underwriting fees for bond refundings. 

Rathmann was accused of conspiring with his former employer, RBC Capital Markets LLC (RBC), to eliminate competition for financial advisory services to the municipal districts in exchange for Rathmann only using RBC for underwriting services. 

Rathmann & Associates serves as a financial advisor to muncipal utility districts in the Houston area. The company advises clients on issuing bond debt and bringing bond issues to market. Part of the services offered include helping bond issuers select underwriters to buy bonds from the issuer and resell them to investors. 

The settlement with the Attorney General's office prohibits Rathman and Associates from entering into similar agreements in the future and requires Rathmann to inform clients of their right to choose an underwriter. Rathmann will pay $450,000 in civil penalties and is responsible for repaying legal costs.

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Texas Office of the Attorney General