It is no secret that Leander ISD has some pretty scary financial 'issues:' Overbuilding, overspending, $2.7 billion in debt obligations, questionable use of Capital Appreciation Bonds, etc. Now there are questions surfacing about the District's financial advisor Southwest Securities. Leon Johnson, Senior Vice President at Southwest, is frequently on hand to provide 'everything is peachy' presentations to the board and upbeat quotes to the mainstream media, but he hasn't really mentioned some of the problems his firm has faced over the last decade.
According to a report from the Financial Industry Regulatory Authority, Southwest Securities has 41 documented "incidents." These incidents include fines and censures for various infractions. Most recently the firm was fined $77,500 on March 15, and has been fined more than $900,000 over the past 2 years. Many of these charges involve illegal actions surrounding the sales of "municipal securities."
One cannot help but wonder if anyone in leadership at LISD has bothered to check the status of the district's financial advisor and leading debt cheerleader. Instead, Southwest Securities' Leon Johnson is repeatedly invited to present regular dog and pony shows to the board and public, and no one seems willing to question Mr. Johnson's credibility on fiscal soundness. No wonder Fitch has substantially downgraded LISD's bond rating.
While this and other aspects of Leander ISD seem like great debate fodder for the upcoming school board elections, long-time trustee Pam Waggoner has refused to debate her opponent, Jim MacKay. Perhaps she does not relish answering questions about the financial state of the district she has long governed.
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Resource: FINRA Report on Southwest Securities