In its toughest sanction yet on pay-to-play-schemes, the Securities and Exchange Commission has ordered Neil M.M. Morrison, a former investment banker at Goldman Sachs and former top aide to ex-state treasurer Timothy P. Cahill, to pay a $100,000 civil penalty for his role as chief political adviser and fund-raiser for Cahill.
The agency’s order also bars Morrison from working in the securities industry for five years as part of the negotiated settlement that brings to an end a 2½-year investigation into his activities as campaign fund-raiser and chief adviser to Cahill’s campaign for governor in 2010.
SEC regulations prohibit investment professionals from using campaign contributions to influence how contracts for securities underwriting are rewarded. The penalties levied against Morrison Thursday are the most severe the SEC has imposed in such enforcements, said Elaine C. Greenberg, the chief of the agency’s municipal securities and public pension unit.
“Today’s tough sanctions against Neil Morrison show that we take abuses of the pay-to-play rules in the municipal securities industry very seriously and that we will hold the responsible individuals accountable for those violations,’’ she said.
The settlement alleges that Morrison, Cahill’s top treasury deputy before joining Goldman Sachs & Co. as a vice president in its Boston office in 2008, was “substantially engaged” in the treasurer’s political campaign while he was soliciting bond work from his office.
“Morrison’s campaign work gave him complete access to Cahill and his staff, who often provided him with information about the office’s internal deliberations involving underwriter selection,’’ the settlement agreement states.
At the same time, the settlement says, Morrison was using Goldman resources, during office hours, to provide “valuable undisclosed ‘in-kind’ campaign contributions to Cahill attributable to Goldman Sachs.’’
It also accused Morrison of soliciting campaign contributions for Cahill when Goldman Sachs was “engaged in or seeking to engage in municipal underwriting business’’ with the treasurer’s office.
Cahill declined to comment on the SEC action. “I don’t know about it; you have to talk to Neil,’’ Cahill said when reached on his cellphone Thursday.
Morrison, who was fired by Goldman Sachs in December 2010 as the case against him and the firm began to unfold, declined to comment.
In a statement, his lawyer, Thomas R. Kiley, noted that Morrison has “neither admitted or denied the facts or the alleged violations of law” in the settlement
The SEC levied a $12 million fine against Goldman in September 2012, alleging what it said was a scheme in which Morrison was fund-raising for Cahill and playing a role as a close political adviser.
The bank, which cooperated in the investigation, agreed to the fine without admitting or denying wrongdoing.
Attorney General Martha Coakley also fined the international banking giant $4 million on the same charges. She had indicted Cahill on allegations that he attempted to use $1.5 million in state lottery funds to boost his independent candidacy for governor. The trial ended in December after the jury deadlocked. The prosecutors and Cahill then negotiated an out-of-court settlement in which he paid a $100,000 civil fine.
‘Morrison’s campaign work gave him complete access to Cahill.’
The 38-year-old Morrison, a former Taunton city councilor, joined the Treasury staff after Cahill was elected to his first term in 2002.
The Globe reported in June 2010 that Morrison negotiated a $455.9 million bond deal with a state water pollution control board that Cahill chaired and operated within the treasurer’s office.
But the details of the close political collaboration between Morrison and Cahill only unfolded in a lawsuit — initiated by Cahill — during his campaign for governor. Filings in that suit identified Morrison as a “top political adviser’’ and behind-the-scenes operator for the Cahill campaign.
Much of the case against Goldman and Morrison rested with an e-mail trail that he created as he sought bond work from his former colleagues in the treasurer’s office. He sent at least 364 campaign-related e-mails using his Goldman Sachs account between September 2009 and October 2010. At the same time, he was pushing the Treasury for bond work.Frank Phillips can be reached at firstname.lastname@example.org.