Lost License

Want some fresh news from the Dennis Smiley front? We have some — sort of.

Smiley, as you know, left his job abruptly as president of Arvest Bank-Benton County in March when he was suspected of loan fraud.

According to Uniform Commercial Code filings with the Arkansas Secretary of State, Smiley reportedly borrowed about $4.5 million from numerous Arkansas banks dating back to 2009.

Now for the fresh news. In what may be a related event, Joseph Edward Bryan “Jeb” Mills, a longtime executive for Arvest Asset Management in Northwest Arkansas, was discharged from that position by a federal regulator on Oct. 10, three days after Mills learned he was being investigated by the Financial Industry Regulatory Authority Inc. (FINRA).

While Mills is no longer a licensed broker with AAM, he is still employed by Arvest in a business development capacity, bank spokesman Jason Kincy said, a position change that actually occurred in April.

“He hasn’t been involved in the brokerage business with Arvest Asset Management since his position change,” Kincy told Whispers.

A position change is one thing. Losing a license is another, and that’s what happened in October.

 

Notice Received

On Oct. 7, FINRA sent Mills a Wells Notice, according to his BrokerCheck profile on the FINRA website. A Wells Notice from FINRA signifies that the Securities and Exchange Commission may commence disciplinary proceedings.

FINRA alleges Mills, 53, violated FINRA Rule 2010 through improper execution of documents.

According to FINRA Rule 2010, a “member in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.”

FINRA regulations state that a broker may be discharged after allegations accusing the broker of any of the following: (1) violating investment-related statutes, regulations, rules or industry standards of conduct; (2) fraud or the wrongful taking of property; or (3) failure to supervise in connection with investment-related statutes, regulations, rules or industry standards of conduct. 

Mills had been executive vice president for AAM. FINRA records show he had been employed by the company since March 1997. He previously was registered to work for Advantage Capital Corp. in Atlanta (1987-89) and Arkansas-based Bowman & Co. (1985-87).

He is not currently registered with any securities firm.

 

An Authorized Signature

A court filing indicates Mills played a role in the ongoing case involving Smiley, although not as a complicit party to the scheme.

Arvest Bank has since settled with 18 of the 20 lenders that claimed Smiley owed them money on toxic loans granted to him for his personal use, using Arvest stock as collateral.

One of the banks, First Bank of Hampton, said Mills gave Smiley authorization, according to a filing with the Benton County Circuit Court on April 30.

“Jeb Mills, as executive vice president, signed the control agreement on behalf of [Arvest Bank] as the intermediary,” the filing states. “Jeb Mills was duly authorized in his official corporate capacity to execute the control agreement on behalf of [Arvest].”

Arvest had filed an interpleader action April 2 in Benton County Circuit Court, hoping to clear itself of any financial liabilities tied to the alleged multi-million-dollar loan scam perpetuated by Smiley.

Kincy would not comment on speculation that Mills’ discharge was in any way related to the Smiley situation, nor would he comment on any of the FINRA filings.

“Jeb is working for Arvest Bank in a non-brokerage role and brokerage licensing is not a necessary requirement of his position,” he said.