‘Screwed’ again: Piper Jaffray fined for violating ban after improper T-Paw donations

Overexuberant support for Gov. Tim Pawlenty has come back to bite a major Minnesota company — for a second time. First, an executive with Piper Jaffray, Minnesota’s top municipal bond underwriter, gave too much money to the state’s top elected official. Then the firm did not abide by its penalty — an industry-imposed ban on bond deals with state agencies — and now faces another round of punishment.

After an initial donation of $200 in 2005, two more $250 checks from Addison “Tad” Piper (pictured), then Piper Jaffray’s vice chairman, to Gov. Tim Pawlenty’s reelection campaign earned the firm a two-year ban on underwriting bonds for state agencies. (A well-known industry rule limits such donations to $250 annually.) As the industry’s top self-regulation officer put it to the Star Tribune at the time, “You’re screwed for two years.”

Now the firm is in trouble again for two much bigger checks it earned on bond deals that violated that ban. The Bond Buyer reports that the Financial Industry Regulatory Authority (FINRA) socked Piper Jaffray with a $25,000 fine Thursday and ordered the firm to disgorge (return) profits of more than 10 times that amount from those deals. (Under the terms of the sanction, Piper Jaffray officially neither admitted nor denied violating the ban.)

FINRA wasn’t specific, but at least one of the two underwriting deals was with the Minnesota Housing Finance Agency for $167,316, the Bond Buyer deduced.

Which agency was involved in the other ban-breaking bond is more of a mystery. One that can apparently be ruled out is the St. Paul Port Authority’s $11.5 million financing for Minnesota Public Radio’s purchase of WCAL-FM from St. Olaf College, the station that became The Current. The timing in 2005 is right, Tad Piper served on the boards of both MPR and St. Olaf, and Piper Jaffray was said to be lined up to do the underwriting. But the Allied Irish Bank ended up as underwriter, and that’s probably just as well for Piper Jaffray, which stood to be thrice-bitten: an investigator’s report released in March raised the chances that MPR’s purchase of WCAL could yet come undone.