Stone Resigns From Accounting Oversight Board After SEC Claims
Mary Stone resigned from the Financial Accounting Foundation’s board of trustees less than two weeks after she was accused by the Securities and Exchange Commission of violating her responsibilities in overseeing Morgan Keegan & Co. mutual funds during the credit crisis.
The FAF, which oversees the board that sets U.S. accounting standards, expects to fill Stone’s spot next year, according to a press release from the Norwalk, Connecticut-based organization. Stone, an accounting professor at the University of Alabama in Tuscaloosa, took a leave of absence on Dec. 10, the day the SEC announced its claims against her and seven other former directors of the funds.
The SEC accused the mutual funds’ directors of allowing assets backed by subprime mortgages to be overvalued as the housing market collapsed in 2007. The action followed a related $200 million settlement with Morgan Keegan, a subsidiary of Raymond James Financial Inc. (RJF), last year and sanctions against two employees in 2010.
Stone and five other directors acted “diligently and in good faith” and intend to contest the SEC’s allegations, which they “emphatically deny,” their attorney, Stephen Crimmins of K&L Gates in Washington, said in a Dec. 10 statement. Stone didn’t return a call for comment today.
Her presence on the board was the subject of a Dec. 13 column by Bloomberg View’s Jonathan Weil, who described her appointment as “a serious lapse.”
The FAF also announced today that it appointed John Dugan, former Comptroller of the Currency, to its board of trustees. Charles Cox, the director of finance for the city of Farmers Branch, Texas, and Teri List-Stoll, treasurer of Cincinnati- based Procter & Gamble Co., also joined the board.
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