WASHINGTON (Reuters) - Former Securities and Exchange Commission attorney Spencer Barasch is expected to settle Department of Justice civil charges that he inappropriately represented alleged Ponzi schemer Allen Stanford, people familiar with the matter told Reuters.
Under the terms of the planned settlement, expected to be announced later this week, Barasch will pay a $50,000 fine, the people familiar said.
He will also settle a disciplinary action before the SEC under which he is expected to agree to a 6-month ban from practicing before the commission, one of the individuals said.
The SEC is tentatively scheduled to vote on the matter behind closed doors on Thursday. Barasch is expected to settle the matter without admitting any wrongdoing.
Barasch, a former head of enforcement for the SEC’s Fort Worth, Texas, office, is now a partner at the law firm Andrews Kurth in Dallas. He has been at the center of a Justice Department probe since at least 2010.
That year, SEC Inspector General David Kotz released a report that found Barasch tried to quash investigations of Stanford while at the SEC, and then later repeatedly tried to get permission to represent Stanford after leaving his SEC post.
The SEC turned down his request each time, but Barasch persisted and eventually did provide some legal counsel to Stanford in the form of roughly 7 billable hours for travel and for reviewing a document on regulators’ inquiry into Stanford’s business, the report found.
In a statement issued last year, however, Andrew Kurth’s managing partner Bob Jewell said he did not feel Barasch violated any conflict of interest rules and disagreed with the findings in Kotz’s report.
Federal conflict of interest laws bar former government employees for life from communicating or making an appearance before the U.S. government under certain conditions, such as being substantially involved in the matter while in government.
A lawyer for Barasch and the SEC declined comment. A Justice Department spokeswoman had no immediate comment. Barasch and his law firm, Andrews Kurth, did not respond to repeated requests for comment.
The settlements come as federal prosecutors prepare for a criminal trial of Stanford, who is accused of running a $7.2 billion Ponzi scheme and deceiving thousands of investors into buying certificates of deposit from his Antiguan bank.
Stanford has denied the charges. Jury selection in the case is scheduled on January 23.
Reporting By Sarah N. Lynch and Aruna Viswanatha; Editing by Tim Dobbyn