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Bob Corker

Executive Summary

May 25, 2016
Bob Corker’s CBL Trades

Senator Bob Corker has engaged in a lengthy pattern of suspicious trades in the stock of
CBL & Associates Properties, a Chattanooga real estate firm where he worked upon graduating
from college and has maintained decades-long business and political ties. Many of the CBL trades
were handled by his broker UBS, with whom Corker also has extensive political and business ties.
On a number of occasions Corker’s trades in CBL preceded public announcements of changes in
UBS ratings for CBL stock. Corker appears to have had frequent contact with CBL and UBS
executives at fundraising events.
Corker has had considerable dealings with the Chattanooga developer of shopping centers,
condominiums and apartment buildings. CBL executives have been among Corker’s most generous
donors, contributing nearly $45,000 to his 2012 reelection campaign, as well as making substantial
contributions to trade groups that support Corker and with whom he works closely.
As a publicly traded REIT sponsor with access to large amounts of capital, CBL is expected to be
among the primary beneficiaries of Corker’s top legislative priority, a housing policy bill that could
lead to the demise of government-backed mortgage insurers Fannie Mae and Freddie Mac.
Another potential beneficiary of Corker’s housing policy program is UBS, which like other big banks
will be able to write more mortgages if the GSEs are eliminated. UBS made a major new push into
the US mortgage business in mid-2010,1 right around the time of some of Corker’s most prescient
trades. UBS has major operations in Tennessee and was previously a tenant of Corker’s real estate
company. Local UBS executives donate large sums to Corker’s campaigns.
At least four of Corker’s trades closely preceded market-moving announcements by UBS regarding
its opinion of CBL stock. For instance, Corker purchased between $2 and $10 million of CBL stock
just prior to a July 2010 announcement that UBS was upgrading its CBL rating from “sell” to
“neutral”. Less than a month later, Corker unloaded between $3 and $12 million of his CBL stock,
days before UBS returned the CBL rating to “sell.” In the interim, CBL’s stock price leapt by more
than 35%, from $11.83 per share to $14.66. This means that Corker was able to make up to $1.87
million in slightly more than three weeks.
Statistical analyses establish the suspicious nature of Corker’s trading.
Between 2007 and 2014, Corker made a total of 51 trades in the stock of CBL. That’s more than
double the number of trades he has made as a senator in any other stock. In 35 of these trades
(68%), Corker bought or sold shortly before a significant spike in the trading volume of CBL stock,
according to a model approximating the SEC’s approach to identifying insider trading.
Corker was twice as likely as a hypothetical average CBL trader to make a trade just before a spike in
volume. Spikes in trading volume are generally triggered by public disclosures or news developments
that cause large numbers of investors in a stock to buy or sell. Any investor who exhibits a pattern

1

http://www.wsj.com/articles/SB10001424052748703787904575403354133923236

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of trading ahead of spikes in the trading volume of a specific stock could be getting advance access
to market-moving information about that company.
Access to advance or inside information doesn’t guarantee an investor will make a profit on every
trade. Corker’s trades are less striking in terms of his actual profits, yet the pattern is still indicative
of irregularities. In at least six of his 51 CBL trades, Corker saw abnormally favorable results,
meaning he either bought just prior to a spike in the price of CBL or sold shortly before a sharp
drop in price. This abnormally prescient performance is three times the expected result for an
average trader of CBL stock.
CBL’s Ties with Corker
Since its 1961 founding, CBL & Associates Properties has grown into the nation’s fourth-largest
mall REIT, and operates in a number of other real estate realms as well. It has undergone a series of
mergers and other institutional changes since its foundation, and began trading publicly in 1993.2
Throughout its existence, Chattanooga’s Lebovitz family has controlled CBL. Seventy-eight-year-old
Charles Lebovitz, who founded the firm with his father Moses, is currently the chairman of the
board. His sons Alan, Michael, and Stephen serve in top management positions and are members of
the CBL board.3
At the outset of what would become a wildly successful career as a real estate developer, Corker
worked for CBL following his graduation from college in 1974. Corker struck out on his own
shortly thereafter, but he and CBL remained linked in a number of ways. Both are prominent
commercial real estate developers in Chattanooga, a city of just 170,000 people. When Corker was
elected mayor of his hometown in 2001, CBL and Corker’s companies were the two largest
developers in Hamilton County, which is home to Chattanooga.4 During Corker’s administration in
Chattanooga, John Foy, the CFO of CBL and a Corker donor, was elected to serve as the
Chattanooga Metropolitan Airport Authority, whose board members are appointed by the mayor.5
Improving air service to Chattanooga was a major agenda item of the Corker administration,
meaning he entrusted a top priority to a CBL officer.6
CBL employees have also been among Corker’s most prominent campaign donors. Prior to his 2012
reelection, the firm’s top executives and their spouses made 24 donations worth almost $45,000 to
Corker’s campaign committee and his PAC. Two-thirds of the contributions came from members of
the Lebovitz family.
CBL employees have also shown similar generosity to trade groups that have also backed Corker,
such as the International Council of Shopping Centers (ICSC) and the National Association for Real
Estate Investment Trusts (NAREIT). These two groups were part of a nine-PAC consortium that

http://www.cblproperties.com/cbl.nsf/corporate_history.html
http://www.cblproperties.com/cbl.nsf/officers_directors.html
4 http://www.highbeam.com/doc/1G1-77390440.html
5 http://www.highbeam.com/doc/1G1-87402490.html
6 http://archives.californiaaviation.org/airport/msg22262.html
2
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held a fundraiser for Corker in Washington in 2011, and they have donated $15,000 directly to his
campaign committee since his arrival to the Senate.7
Stephen Lebovitz is the current chair of the ICSC, a post Charles held in the 1990s, and members of
the Lebovitz family have served on the NAREIT board of governors for several years.8 Since
Corker’s election to the Senate, CBL executives have contributed more than $50,000 each to
NAREIT and the ICSC.
Perhaps thanks to this support, Corker has emerged as a prominent advocate of positions favoring
CBL and the trade groups representing the firm. Commercial real estate investors like CBL stand to
be among the biggest winners should Fannie Mae and Freddie Mac be shut down, which is a pillar
of the housing finance reform that Corker has championed from his perch on the Senate Banking
Committee. According to the publication Multifamily Executive:
Unlike smaller entrepreneurial players, the REITs have many financing avenues available to them by virtue
of their size and public-company status. And should the GSEs go away, many small owners might be forced
to sell—and large owners would be there, capital in hand, ready to buy.9
CBL, which has been publicly traded for two decades and whose investors included major
institutional investors like BlackRock and Vanguard, is an example of a real estate firm poised to
thrive following the removal of Fannie and Freddie.10
The scale of Corker’s investments with CBL also offers some indication of their unique relationship.
Corker’s portfolio has been more heavily concentrated in CBL than in any other stock, despite the
fact that, while it is a big fish in the world of REITs, CBL is a thinly traded security heavily subject
to market swings. Since his election to the Senate in 2006, at which point Corker began making
annual personal financial disclosures that detailed his stock holdings, he has carried out 51 trades in
CBL stock, by far the largest number in his portfolio. The next closest stock was Apple, with 19
trades, followed by AIG (which he unloaded in 2007, prior to its collapse) with 15, and Wells Fargo
with 14.
Corker and UBS
Much of Corker’s trading activity implicates or otherwise involves UBS, an institution with which
Corker has a long history of political and business ties. Corker has had accounts or investments at
UBS since he began filing federal financial disclosures in 2004. At some point prior to 2005, UBS
became a tenant in the Corker-owned Krystal Building in downtown Chattanooga.11

https://www.opensecrets.org/pacs/pacgot.php?cycle=2006&cmte=C00217638
https://www.opensecrets.org/pacs/pacgot.php?cycle=2016&cmte=C00303339
8 http://www.icsc.org/press/stephen-d.-lebovitz-president-ceo-cbl-associates-properties-inc.-elected-ic
http://www.icsc.org/research/research-on-demand-videos/b-industry-leaders-series/charles-b.-lebovitz
https://www.reit.com/nareit-you/about-nareit/advisory-board-governors
9 http://www.multifamilyexecutive.com/business-finance/reits-stand-to-gain-from-the-gses-demise-1_o
10 http://www.cblproperties.com/cbl.nsf/ownership.html
11 http://www.chattanoogan.com/2005/7/18/69616/Corker-Group-Renovating-Tallan-Building.aspx
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During this period, Corker was serving as mayor of Chattanooga. Among UBS’ major local
customers in those years was CBL.
UBS executive Douglas A. Brown, senior vice president for wealth management in the Chattanooga
office, was one of the first contributors to Corker’s Senate campaign in November of 2004 and has
given him a total of approximately $4,400. UBS has given Corker some $75,000 during his Senate
career, making it his eleventh largest contributor. Two years ago, Corker and his longtime political
ally, Gov. Bill Haslam, claimed joint credit for bringing a major new UBS back office facility to
Nashville.12
Corker’s trading activity came under scrutiny by the Wall Street Journal in late 2011 as part of a major
award-winning investigation by the paper into suspected insider trading on Capitol Hill. The
newspaper reported on a series of 25 trades by Corker in CBL through 2010, but did not have access
to his 2011 trades. Based on this limited information, the paper concluded that Corker had
performed comparatively poorly on his CBL trades.
In his interview with the Journal, Corker seems to have made no mention of UBS playing a role in
the trades. Rather than the product of a broker operating a discretionary account making trades on
his behalf, Corker indicated that his CBL trades were a strategy that he oversaw:

12

https://news.tn.gov/node/11262

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“I've watched the trading range on this hometown-based stock and have found that especially during times of
market volatility it trades within wide ranges,” Mr. Corker said. “I've bought it heavily when it is at the low
end of that range and then I hold it until there is upward movement, when I sell.”13
Shortly after the article appeared, Corker in early 2012 filed an erroneous and misleading financial
statement with the Senate that had the effect of minimizing his CBL trading activity. It was released
in June of 2012 and went uncorrected for a year.
Just the month before, in May 2012, UBS liquidated Corker’s total position in CBL – worth between
$5 million and $25 million – amid a sharp run-up in CBL shares from around $11 per share in
November 2011 to about $16 per share on May 2 of 2012. His profits from the trade were between
$1 million and $5 million. These gains were also not made public the latter half of 2013.
The role of UBS as Corker’s broker came to light in an unusual amendment filed by Corker with the
Senate in August of 2013 in order to belatedly correct two major misstatements Corker made about
his UBS account in his original disclosures for the 2011 year. According to the amended filing, the
2011 form had overstated the dollar value of his UBS account by at least $4 million and possibly as
much as $24 million, while a $1 million-$5 million position he maintained in CBL stock through
UBS was omitted.
Corker’s accountant sent an opaque explanation to the Senate Ethics Committee that he was never
provided with the necessary information about the UBS account. “No details were provided and
separate tax reports received from UBS showed purchases and sales of CBL stock during the period
only to the extent that gain or loss was to be recognized for tax purposes. We used that information
to assume that all of the assets held in the account were cash at the end of 2011.”
In plain English, the accountants appear to be saying the UBS and/or Corker failed to provide them
with standard details of his UBS account activity, forcing the accountants to assume there wasn’t any
such activity.
With the help of hindsight and statistical analysis, Corker’s explanation to the Journal for his trading
with UBS in CBL lacks plausibility.
On repeated occasions, Corker’s CBL trades—whose returns and whose coincidence with surges in
volume both outpace random chance—preceded announcements that would be likely to have an
impact on share price, from changes to the ratings of CBL stock to disclosures of new investments.
In many cases, this fortuitous timing has also generated substantial short-term returns for Corker.
The most frequent such event was the change in a rating of CBL stock by UBS just after a Corker
trade. For instance, on June 29, 2010 and July 7, 2010, Corker made two purchase of CBL stock
worth between $2 million and $10 million.14 One day after the second of these purchases, UBS
announced an upgrade of CBL stock from “sell” to “neutral.”15 The stock then shot up by nearly

http://www.wsj.com/articles/SB10001424052970203899504577126940157408980
All information about specific trades in this section comes from Corker’s personal financial disclosure, filed with the
Office of Governmental Ethics.
15 “UBS Upgrades Several REIT Stocks”, StreetInsider.com, July 8, 2010.
13
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19%, from its price of $11.83 on July 7 to $14.04 on July 28.16 This equates to profits for Corker of
between approximately $374,000 to $1.87 million in three weeks.
From July 26 to July 28, 2010, Corker essentially unloaded his prior purchase in four trades worth
between $3 million and $12
million. On August 5, UBS
dropped its rating of CBL
from “neutral” to “sell.”17 The
stock subsequently
plummeted.
This trading activity in June
and July of 2010 allowed
Corker to ride CBL’s spike for
three weeks following the
rating upgrade and
subsequently to escape prior
to the market’s reaction to the
coming downgrade.
Corker trades preceded advantageous ratings announcements by UBS on at least two other
occasions as well. On October 7 and October 8, 2010, Corker sold between $1.1 million and $5.25
million in CBL stock. On November 4, UBS reiterated its “sell” position on CBL, precipitating
another tumble in the CBL stock price.18
On June 10 and June 13, 2011,
Corker purchased between $2
million and $10 million in CBL
stock. A day later, UBS again
upgraded the stock to “neutral”
once more.19 The stock price
again leapt upward, from
$16.91 the day of Corker’s last
purchase to $18.04 on June 22,
when Corker executed the first
of two stock trades to liquidate
most of his holdings.20 Once
more, his purchase just prior to

16

http://finance.yahoo.com/q/hp?s=CBL+Historical+Prices

17

http://www.streetinsider.com/Downgrades/UBS+Downgrades+CBL+%26+Associates+%28CBL%29+to+Sell/5867
531.html
18

http://www.streetinsider.com/Analyst+Comments/UBS+Reiterates+a+Sell+on+CBL+%26+Associates+%28CBL%2
9%3B+A+Valuation+Conundrum/6077486.html
19

http://www.streetinsider.com/Upgrades/UBS+Upgrades+CBL+%26+Associates+%28CBL%29+to+Neutral/657840
6.html
20 http://finance.yahoo.com/q/hp?s=CBL+Historical+Prices

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a UBS announcement would have allowed him to make hundreds of thousands, if not millions, of
dollars in just a few weeks.
The four examples of Corker’s trades front-running UBS announcements regarding CBL are all the
more significant by how infrequent they were, meaning that an overwhelming number of UBS
pronouncements on CBL’s prospects coincided with substantial trading by Corker. Preliminary
research located only six such announcements during the entire period that Corker has held CBL
stock, and only four announcements, all of which are described above as following Corker trades,
during the time when the senator was actively trading CBL.
Corker’s trades are also sometimes followed by significant announcements by CBL. His January 24,
2011 purchase of between $500,000 and $1 million came five days and two weeks, respectively, prior
to an announcement of new investments in four CBL properties and an earnings conference call
that revealed better than expected results.21 Corker’s purchase of between $1 million and $5 million
on June 8, 2010 came the same day that CBL announced that it secured $298 million in financing
activity.22

http://www.highbeam.com/doc/1P1-188961414.html
“CBL & Associates sees FY11 FFO $2.10-$2.15 vs. consensus $2”, Theflyonthewall.com, February 8, 2011.
22 http://nreionline.com/news/joint-venture-recapitalizes-streets-southglenn
21

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Statistical Evidence of Insider Trading
On 35 occasions between 2007 and 2014, Senator Bob Corker executed trades in CBL stock that
preceded significant spikes in trading volume, often resulting in price fluctuations that benefitted the
senator.23 According to a statistical analysis similar to the model the SEC uses to detect securities
fraud, Corker’s trades predict abnormal surges in volume 64% of the time, twice the rate for the
average stockholder’s trades.24
Conservative estimates suggest that Corker enjoyed abnormal profits from his CBL trades on at least
six occasions, although because of the statistical limitations of this type of study, this number could
be much higher. In any event, these six occasions triple the rate of abnormal returns expected for
the average investor.
Corker traded CBL stock 51 times on 39 different trading days between 2007 and 2014, nearly three
times more than he traded any other stock. Corker often moved millions of dollars in and out of
CBL stock on a given day. On four occasions, he bought or sold up to $25 million in CBL shares in
a single day. With no other stock does Corker exhibit a comparable pattern of behavior.
Many of these suspicious trades occur on the same day or within a few days of one another, an
example of abnormal trading volumes that investigators often use as a bellwether for insider
trading.25 For example, according to his personal financial disclosure filings with the Senate, Corker
sold between $2.1 and $4.25 million in CBL stock over the course of five trades on February 24,
2014. The very next day, Corker made three additional sales, totaling as much as $1 million in CBL
stock. Within the next 20 trading days, the market as a whole followed suit, with a significantly
significant spike in volume following thereafter.26
Many of Corker’s trades preceded not only abnormal spikes in trading volume, but also deviations
from expected returns that worked in the senator’s favor. Corker bought between $500,000 and $1
million in CBL stock on December 28, 2007. Over the next 20 trading days, stockholders traded
thousands more shares than predicted by recent market activity. This market fluctuation rewarded
Corker richly, as the price of CBL stock leapt by 11% during that period, from $13.68 to $15.12.
Cumulative returns were 26% higher than anticipated over the 20 trade days, a statistically significant
deviation from normal returns.
In 2010, Corker made five more lucrative trades that anticipated market movement. On June 11,
Corker sold between $500,000 and $1 million of CBL stock over two transactions. Three days later,
he made two additional sales of between $1,000 and $15,000 each. Over the 20 trading days that
followed, shareholders traded more shares than anticipated by recent activity and returns fell a
statistically significant 20% below normal, as the share price slipped from $10.86 to $9.76, a decline
of more than 10%.

All of Corker’s publicly-disclosed trades occur within this period.
The figure is 64% rather than the 69% that is the result of 35 trades divided by 51 days, because the model is based on
unique trading days, of which there are 39 (with 25 of them preceding surges in volume) rather than 51. So instead of
35/51=.686, or 69%, the figure comes from 25/39=.641, or 64%.
25 http://dealbook.nytimes.com/2014/06/16/study-asserts-startling-numbers-of-insider-trading-rogues/?_r=0
26 While trading volumes over the 20 trading days following February 25th 2014 were statistically higher than expected,
actual returns over this period, while negative, were not statistically distinct from expected returns.
23
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On September 29, 2010, while CBL stock prices remained low, Corker bought up to $1 million in
CBL stock. Over the next 20 trading days, shareholders traded nearly 4,000 more shares that recent
market activity would predict, and the value of CBL stock rose nearly 25%. Corker couldn’t have
anticipated this growth from CBL’s recent stock performance; on the 20 trading days following
September 29, as the share price spiked from $10.06 to $12.52, returns were 13% above normal, a
statistically significant difference.
In the period between 2007 and 2014, Corker made 21 additional trades over 19 days that preceded
statistically significant changes in the volume of CBL traded. While returns following these trades
were not statistically distinct from expectations based on recent market performance, abnormal
volume alone is often used as an indicator of improper activity. These trades suggest that Corker
moved on CBL before other shareholders, even if these moves may not have been beneficial in
hindsight.
The model used to detect abnormal returns (which is discussed in greater detail below, in the
“Statistical Methodology” section) does not seek to identify trades in which Corker made a
particularly great deal of money, or avoided substantial losses. Rather, it defines anomalous trading
as those in which the subsequent return or volume was not predicted by recent market activity. As a
result, many of Corker’s most lucrative trades, including several in which he appears to have secured
millions of dollars of profits in just a few weeks time, do not register as statistically abnormal. Many
of these highly lucrative though not statistically abnormal trades have other indicia of impropriety.

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Likely Counterpoints
The overall confluence of circumstances uniting Corker and CBL represents an overwhelming case
that the senator had access to and acted on inside information:






CBL executives are personal acquaintances of Corker and frequent campaign donors.
Corker traded with CBL on 51 occasions, more than twice as often as he did any other
stock.
Corker’s CBL trades’ favorable returns outpaced that of the average investor by a factor of
more than three.
Corker’s CBL trades repeatedly preceded sudden surges in volume in trading, more than
twice as often as would be expected for an average investor.
On multiple occasions, Corker’s CBL trades were followed by announcements, both from
his broker and the firm itself, that would likely affect stock prices.
Corker’s advocacy for the disappearance of Fannie Mae and Freddie Mac would have been a
major windfall for CBL shareholders.
Corker falsely disclosed the liquidation of his CBL stock to the Senate in 2011, and was
obligated to file an amended financial statement, which revealed a continuing position with
CBL worth up to $5 million, in 2013. Many of the trades that have indicia of insider trading
occurred during the lapse between the false disclosure and the filing of the correction.

Corker advocates would likely respond to these allegations by making two points: first, in a robust
market with countless moving parts, it’s always possible to cherry pick a few trades by an active
investor and juxtapose them with real-word events to suggest the existence of an improper
relationship that doesn’t exist; and second, as the Wall Street Journal reported in 2011 in a profile of
Corker’s investments, the senator would have done better in some circumstances had he held on to
his CBL stock rather than selling it, an indication that his information can’t possibly give him an
unfair advantage.
Neither of these arguments offers a compelling rebuttal to the evidence of his improper relationship
with CBL. The Wall Street Journal’s reporting is based on incomplete information, because instead of
a premature selloff as he indicated, Corker continued to hold onto a substantial position in CBL, as
the subsequent amendments to his disclosures demonstrated. Corker also re-invested millions in
CBL and continued to trade in the stock through 2014.
Furthermore, whether or not Corker might have performed better had he held onto the stock is
immaterial; insider trading punishes accessing and acting on information, regardless of whether the
investing decision led to a successful return.
Regarding the other likely rejoinder, it is certainly possible that some of the oddities involving
Corker’s CBL trades are merely coincidental. Nonetheless, the case against him does not rely on a
single trade or even a single method for testing the possibility of insider trading.
Applying statistical models that resemble benchmarks that securities regulators use to initiate
inquiries, on six of his 51 CBL trades Corker’s subsequent returns outperform random chance, more
than triple the rate of abnormal returns that an average investor could expect on CBL. On 35 of
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Corker’s CBL trades, they precede abnormal spikes in the volume of CBL transactions, indicating
his trades came prior to disclosures that moved that market for CBL stock. This is double the
average investor’s rate of coincidence with surges in volume.
The anecdotal evidence supports the thrust of the statistical evidence, and also rebuts any claim that
the case against Corker is the product of cherry-picking single events. It demonstrates both a pattern
of irregular trades across a number of years. As noted above, Corker’s trades preceded CBL ratings
announcements by his own broker on four occasions, and in each case, the announcement validated
Corker’s previous trade. On no occasion located to date did a UBS ratings announcement contradict
Corker’s most recent decision regarding his CBL investments.
This anecdotal trading evidence is all the more powerful given Corker’s unique relationship with
CBL: He has invested more money in CBL and has traded the stock holdings more actively than
with any other firm. Corker’s landmark domestic issue—his advocacy for the disappearance of
Fannie Mae and Freddie Mac—stands to confer enormous benefits on large REITs with access to
public financing, such as CBL.
In other words, if Corker was facing only piece of the evidence arrayed against him, the response
that this is mere coincidence might be more compelling, but that is not the case.
Statistical Methodology
To test whether Corker’s trades outperform random chance, we conducted a placebo test using
fictional trade dates. We shifted each of Corker’s trades 50, 100, and 150 trading days into the future
and re-ran our analysis as if the trades had occurred on those dates. While Corker’s trades preceded
abnormal volume on 25 trading days, random trading dates only preceded significant fluctuations in
trading volume on 12.6 occasions. In other words, Corker was twice as likely as the average
shareholder to trade in advance of abnormally high trading volume. The difference between the
number of Corker’s trades that preceded trading volume fluctuations and the number of fictional
trades that preceded abnormal volume was statistically significant in two of three trials, so we reject
the hypothesis that the timing of Corker’s trades is purely coincidental.
We conducted the same test for abnormal returns, to determine whether Corker is more likely to
profit from auspiciously-timed trades than the average shareholder. Once again, we shifted each of
Corker’s trades 50, 100, and 150 into the future and re-ran the analysis. While Corker’s trades
preceded abnormally advantageous returns 10% of the time, random trading dates only precede
beneficial abnormal returns 3% of the time. One in three trials showed a statistically significant
difference between fictional performance and Corker’s performance.
This analysis uses the event study methodology, a common tool for analyzing abnormal stock
performance. The Securities and Exchange Commission uses event studies in the detection of
insider trading.27 An event study estimates the expected returns or trading volumes of a stock based
on past performance, and then measures deviations from those expected returns following an
occurrence.

Mitchell, Mark and Jeffrey Netter. 1994 “The Role of Financial Economics in Securities Fraud Cases: Applications at
the Securities and Exchange Commission.” The Business Lawyer. 49(2): 545-590.
27

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This type of analysis requires two time windows: an estimation window, which provides a baseline
for normal stock performance, and an event window, the time period over which an event might
impact share prices. We used an estimation window between 180 and 10 trading days before each
trade, as is standard practice in such analysis.28 This time period captures normal fluctuations in
stock price, but ends well enough in advance of the event of interest to avoid contamination. We
used an event window of 20 trading days following each trade, based on the assumption that insiders
can trade on information several days in advance of that information becoming public. Twenty days
is a common event window length in studies of insider trading.29
In an event study, the analyst regresses a stock’s returns or trading volume during the estimation
window on the returns or trading volume for a broad market index over the same period. She then
predicts expected returns for the event window as a linear function of the relationship between the
security and the market during the estimation period. Actual returns or volumes that are different
from expected returns or volumes are considered “abnormal.” The key value in an event study is the
sum of all abnormal returns/volumes over the course of the event window. We use the standard test
statistic discussed in Kothari and Warner to determine whether cumulative abnormal returns or
volumes following each event are statistically significant.30 If the cumulative abnormal return is more
than 1.85 times the abnormal return standard deviation multiplied by the square root of the number
of days in the event window, then an event has a statistically significant impact on stock returns. The
process for calculating the significance of abnormal volume is identical.
We used stock data from the Yahoo! Finance historical stock tables, and log-transform returns and
trading volumes to ensure that the data is normally distributed. Because advantageous abnormal
returns are positive in the case of stock purchases and negative in the case of stock sales, we split
events into purchases and sales and run these analyses separately for the models using stock returns.
Because we are only interested in spikes in trading volume, we pool both purchases and sales in the
volume model.
Because insiders typically only have access to privileged information on a handful of securities and
this study focuses on Corker’s relationship with CBL, this is a “single-firm event study.” While this
type of event study is common in securities litigation, recent literature notes that these models have
relatively low statistical power.31 While the test statistic described below rules out the possibility of
false positives, low statistical power fails to rule out the possibility of false negatives. In effect, single
firm event studies may underreport the incidence of abnormal returns following an insider’s trades.

See KOTHARI, S., & WARNER, J. B. (2008). ECONOMETRICS OF EVENT STUDIES. Handbook of Empirical
Corporate Finance SET, 1, 1; Fama, E., L. Fisher, M. Jensen and R. Roll, 1969, "The adjustment of stock prices to new
information," International Economic Review 10: 1-21.
29 Cheuk, Man-Yin, Dennis K. Fan, and Raymond W. So. “Insider trading in Hong Kong: Some stylized facts.” PacificBasin Finance Journal 14.1 (2006): 73-90; Thalassinos, Eleftherios, Dimitrios Maditinos, and Athanasios Paschalidis.
“Observing evidence of insider trading in the Athens Stock Exchange.” Journal of Economic Structures 1.1 (2012): 1-26.
30 See KOTHARI, S., & WARNER, J. B. (2008). ECONOMETRICS OF EVENT STUDIES. Handbook of Empirical
Corporate Finance SET, 1, 1
31 Heaton, J. B., and Alon Brav. "Event Studies in Securities Litigation: Low Power, Confounding Effects, and
Bias." Event Studies in Securities Litigation: Low Power, Confounding Effects, and Bias (March 19, 2015) (2015).
28

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At minimum, Corker’s trades of CBL preceded abnormal increases in trading volume on 25 trading
days. His purchases of CBL stock on at least two trading days precede abnormal positive returns,
and his sales of CBL preceded abnormal negative returns on at least two occasions.

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Bob Corker’s Foreign Stock Trades
Over the span of of just four months in early 2014, Sen. Bob Corker made a rapid-fire burst of
lucrative short-term trades in European companies, many of them small and obscure. Beyond the
improbably large returns from these trades, they are noteworthy for coinciding with Corker’s
assumption of the top Republican post on the Senate Foreign Relations Committee.
According to the Personal Financial Disclosure that Corker filed last year with the Senate ethics
committee, the Senator made 92 trades in the stocks of 29 foreign companies from January 2014 to
April 2014. Cumulatively, Corker’s foreign stock purchases during the period were worth up to
$945,000.32
While some of these firms are well known—for instance, Allianz and BASF—many would be
anonymous to American investors. They include a French REIT called Unibail-Radamco, an Oslo
chemical firm known as Yara International, and Perth, UK-based energy company SSE PLC, among
others.
Corker’s hold time was extremely short in every case. He sold the stocks after an average of slightly
more than three months, and held onto none for even five months. Such brief hold times are highly
unusual for an ordinary investor and unusual even among investment professionals with a “long”
orientation.
The trades were also extraordinarily profitable. Nearly 80% of Corker’s stock picks were winners,
and on 35 out of the 63 purchases, his annualized returns exceeded 10%. His overall average annual
return was 14.7%, approximately three times the S&P 500’s results during that period.33
For instance, when Corker purchased stock in Warrington, UK’s United Utilities Group PLC on
January 8, 2014, the firm’s share price was $21.71. When he sold four and a half months later, it had
jumped to $28.74 per share, an increase of 32.4%, which equals an annualized return of 88.3%.34
Several other trades brought similar results. He purchased stock in Coventry, UK-based utility
company Severn Trent PLC at $27.25, and sold four and a half months later after it had jumped to
$32.87, a spike of 20.6% and an annualized return of 56.2%. Corker’s purchase of SSE PLC
preceded a 13.7% jump over his approximately 10-week hold time, which amounts to a 63.4%
annualized return.
Both the volume of Corker’s foreign trades and the companies he targeted are highly unusual for a
member of Congress. Corker is one of only three senators in 2014 who made direct equity
investments in foreign-traded stocks, and his 92 trades of foreign stocks on Corker’s PFDs were by

All information on on Corker’s stock trades comes from his Personal Financial Disclosure for the 2014 calendar year,
accessed at Legistorm. https://www.legistorm.com/pfd_office/member/Sen_Bob_Corker/814.html
32
33

https://www.google.com/finance/historical?cid=626307&startdate=Jan+8%2C+2014&enddate=May+20+2014&num
=30&ei=GeA4V_iTFsKce_m6i6gG
34 All share price information was accessed via Bloomberg Terminal.

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the far the most among that group. He also invested in obscure companies that would be
anonymous to most American investors.
For instance, Kay Hagan’s 2014 PFD lists 30 direct equity trades in foreign companies. However,
she does not list the exchange on which the stocks traded, and many of the companies were major
firms—Alibaba and Michael Kors are two—which suggests that much of Hagan’s trading in foreign
companies could have taken place on American exchanges.35
A small number of other Senators, such as Richard Burr and Mark Warner, also invested in foreign
stocks through indirect vehicles, like blind trusts and IRAs.36 Most of the Burrs’ OTC trades were
sales of major foreign multinational stocks that they had owned for several years, or new purchases
of multinational companies that they held onto beyond the end of the reporting period. In contrast
to Corker’s average hold time of three and a half months, the Burrs’ investment strategy is focused
on long-term plays, as is typical.
Overlap between Corker’s Investments and Congressional Travel
Corker’s trading of foreign stocks is also complicated by his status as chairman of the Senate Foreign
Relations Committee, and therefore one of the Senate’s most important ambassadors abroad.
Among his colleagues on the Committee, the volume of Corker’s foreign trading stands out even
more: Only one other member of the Senate banking committee appears to have made a foreign
trade in 2014, and that member, Jack Reed, reported only a single purchase of stock in a foreign firm
without listing the exchange, indicating that it could be an American-traded stock.
Corker has traveled extensively while serving on the Senate Foreign Relations Committee, visiting at
least 65 countries since joining the Senate Foreign Relations Committee, and 19 since becoming the
ranking Republican on the Committee in 2013. Several of these countries are home to companies
where Corker subsequently invested.37
For instance, in the first quarter of 2014 he visited the United Kingdom and Switzerland with
financial policy staffer Michael Bright and chief of staff Todd Womack. Corker was in Switzerland
for the Davos World Economic Forum from January 22 through 25, 2014. During the period, he
invested in three Swiss firms at the time: Nestlé, Swisscom, and Roche Holdings.38

Personal Financial Disclosures for 2014 calendar year for Kay Hagan, downloaded from Legistorm.
https://www.legistorm.com/pfd_office/member/Former_Sen_Kay_Hagan/931.html
36 Personal Financial Disclosures for 2014 calendar year for Richard Burr and Mark Warner, downloaded from
Legistorm.
https://www.legistorm.com/pfd_office/member/Sen_Richard_Burr/15.html
https://www.legistorm.com/pfd_office/member/Sen_Mark_Warner/933.html
37 http://www.timesfreepress.com/news/local/story/2014/mar/31/corker-values-trips-to-worlds-troublespots/135834/
https://www.gpo.gov/fdsys/pkg/CREC-2014-08-08/pdf/CREC-2014-08-08-pt1-PgS5339-6.pdf
https://www.gpo.gov/fdsys/pkg/CREC-2014-11-12/pdf/CREC-2014-11-12-pt1-PgS5927.pdf
https://www.gpo.gov/fdsys/pkg/CREC-2015-05-04/pdf/CREC-2015-05-04-pt1-PgS2603.pdf
https://www.gpo.gov/fdsys/pkg/CREC-2015-11-05/pdf/CREC-2015-11-05-pt1-PgS7833.pdf
https://www.gpo.gov/fdsys/pkg/CREC-2016-02-09/pdf/CREC-2016-02-09-pt1-PgS744-2.pdf
38 http://www3.weforum.org/docs/AM14/WEF_AM14_Media_Participants_List_kho257j.pdf
35

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There are no media reports that provide details of Corker’s trip to the UK, but during this period he
invested in eight British companies: United Utilities Group, Imperial Tobacco Group, Severn Trent,
SSE plc, BAE Systems, Compass Group, Centrica, and Wm Morrison Supermarkets. In 2013 he
made two trips to Germany; he would invest in seven German companies the following year:
Daimler AG, Allianz SE, Siemens, Deutsche Post AG, BASF SE, Munich RE Group, and Deutsche
Telekom.
While a full accounting of Corker’s activities while abroad is unavailable—in some cases, he never
issued a press release on the trip—there is some evidence that Corker received material nonpublic
information during his trips abroad. For instance, a 2008 diplomatic cable from the US Embassy in
Nigeria describes a meeting between Corker and Shell officials, in which the Senator received
information that would be relevant to any potential investor:
In response to questions from Senator Corker and Ambassador Sanders, Omiyi described the current
situation in the petroleum sector and prospects for near to mid-term growth. Omiyi currently chairs the
industry producers group and also sits on a government coordinating committee for the energy sector. He
predicted new investments totaling about $80 billion over the next five years, including major investments by
Shell. Omiyi noted that there were two new liquefied natural gas (LNG) plants on the drawing boards and
talk of a Trans-Sahara Gas Pipeline. There will be additional gas-fired power plants, he added.39
During the same trip, Corker and other members of the delegation spoke with various Nigerian
cabinet minister about various issues, including investments by Shell and Exxon in the nation’s oil
sector.40
Although Corker’s hedge fund holdings are largely shrouded in secrecy, there was at least one
Corker-held fund that invested in oil companies with Nigerian holdings during that period. Priority
Capital Advisors, a Richmond, Virginia fund where Corker invested between $1 million and $5
million from 2006 to 2009, upped its investments in multinational oil companies from $1.15 billion
to $1.4 billion in the months after Corker’s trips. The new investment was largely concentrated in
Exxon, which launched upon a massive new natural gas project in Nigeria in July 2008.41
Priority Capital was the only one of Corker’s several hedge fund investments to file 13-F forms with
the SEC, providing an itemized list of its holdings. As a result, it is impossible to tell if he had other
investments Exxon, Shell, or other actors in the Nigerian oil industry.
The overlap between Corker’s official travel and his investments resembles the case of Florida
Congressman Alan Grayson, who is currently the subject of a House ethics investigation for
allegedly using Congressional trips to gather information on future investments by his hedge fund.
The two cases have some substantial differences—Grayson ran his own fund, and is subject to a
broader inquiry into his exploitation of his Congressional post.42 But Corker’s investments in hedge
funds run by close associates and his scores of overseas equity trades, neither of which has any

https://wikileaks.org/plusd/cables/08ABUJA735_a.html
https://search.wikileaks.org/plusd/cables/08ABUJA630_a.html
41 http://www.petroleumafrica.com/exxonmobil-starts-up-nigeria/
42 http://www.orlandosentinel.com/news/politics/political-pulse/os-grayson-foreign-investments-hedge-fund20160324-story.html
39
40

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analog among other members of Senate, put Corker in a position to exploit his foreign travel just as
easily as Grayson.
Bob Corker and Wells Fargo
Executive Summary
Wells Fargo, the nation’s largest mortgage lender, stands to benefit more than any other bank or
fund from Sen. Bob Corker’s principal legislative objective, GSE reform. Public records show that
Corker has extensive political and financial connections to the bank, including a suspiciously welltimed 2014 investment by the senator in a Wells-financed shopping center development.
Wells Fargo is the longtime banker to the Chattanooga real estate firm where Corker got his start
and subsequently invested millions of dollars, CBL & Associates, which has borrowed billions of
dollars from the bank. Wells also extended new loans in 2010 to a key Corker business associate and
prominent donor. Corker’s campaign funds are managed by a former Wells executive, while his
Senate staff has included a former Wells lobbyist and a former mortgage trader at Wachovia,
subsequently acquired by Wells.
Corker’s $1 million-plus 2014 investment in an Alabama shopping center was made just days before
the project’s developers disclosed that they had secured financing from Wells, a crucial step that
assured the project would be built and likely caused Corker’s new investment to spike in value
almost immediately. In the case of the 2010 loans, Wells stepped in just before the original financing
was to expire, providing some $28 million in refinancing and rescuing Corker’s longtime supporter
and business associate Henry Luken from imminent bankruptcy.
Corker’s first chief of staff in the Senate, Armand Dekeyser, was a Wells lobbyist immediately prior
to joining Corker’s office. Another former top staffer and a major voice for privatizing mortgage
insurance, Michael Bright, used to work for Wells subsidiary Wachovia. Corker’s Senate campaign
invests its holdings in a fund owned by former Wells executive and Corker backer Aon Miller
despite the recent suspension of his license by FINRA. Wells has also donated thousands of dollars
to Corker’s campaign and his PAC.
Corker has acted as the foremost congressional champion of a policy shift that would confer billions
or possibly trillions of dollars in benefits to Wells Fargo: the elimination of government-backed
mortgage guarantors Fannie Mae and Freddie Mac (also known as the GSEs). Corker’s 2013 bill,
known colloquially as Corker-Warner, proposes to wind down the GSEs, and has served as a
legislative blueprint for privatization. Corker has also been a persistent advocate of other measure to
increase the role of banks in housing finance despite their role in causing the 2008 mortgage crisis.
Industry analysts believe Wells Fargo – the number one retail mortgage lender, mortgage servicer,
and lender to low-income borrowers – would be the the biggest winner resulting from the decline or
demise of the GSEs. While its support for Corker-Warner has been largely behind the scenes
(presumably to avoid drawing undue scrutiny to the plan’s unpopular consequences), Wells has
openly called for other measures to increase private-sector participation in housing finance.

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Wells Fargo is among the most troubled and reckless of the big
banks. On April 12, the Federal Reserve determined that Wells
made “material errors” in its plan for dealing with insolvency. In
February, Wells agreed to pay $1.2 billion for defrauding the
Federal Housing Administration. The bank also has a long
history of predatory and discriminatory lending practices that
have forced it to pay billions in fines and loan
adjustments as part of settlements with federal, state and local
governments. Other settlements have resulted from the
bank's deceptive advertising of loans and abusive foreclosure
practices, while banking regulators last fall accused Wells of
failing to combat money-laundering amid reports of its
involvement in a massive political scandal in Malaysia.

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May 25, 2016

Wells Fargo and Corker’s Personal Finances
Wells has most dramatically affected Corker’s financial interests through its backing of a 650,000square foot shopping center development in Mobile, Alabama called McGowin Park. Corker’s 2015
financial disclosure states that on July 11, 2014, he purchased a stake in McGowin Park, LLC worth
between $1 million and $5 million. The project, one of the largest retail developments in Mobile in
decades, is a joint venture by Jones Lang LaSalle, a Chicago-based developer, and The Hutton
Company, a construction company based in Chattanooga owned by Karen Hutton, a longtime
Corker supporter and former CBL executive.43

Six days after Corker made his investment, McGowin Park LLC made a Uniform Commercial Code
(UCC) filing in Alabama disclosing that it secured a loan from Wells Fargo to finance the project.44
No other UCCs have been filed, suggesting that Wells Fargo is the sole source of financing for the
massive project – which is projected to generate $200 million in annual revenues. At a September 19,

43
44

http://lagniappemobile.com/new-retail-complex-win-win-according-manager/
http://arc-sos.state.al.us/cgi/uccdetail.mbr/detail?ucc=14-0293530&page=name

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2014, Mobile County Commission meeting, a lawyer representing McGowin Park mentioned only
Wells Fargo as a source of financing.45
The timing of Corker’s investment suggests he may have had advance information about the Wells
Fargo construction loan, perhaps the single most important factor affecting the project. The
completion of a major planned commercial development depends largely on the developers’ success
in securing the necessary loans. Should the developers fail to do so, such projects typically collapse
and the investors lose their stake. As a result, any development investment is highly speculative prior
to the financing, but much more certain thereafter. For that reason, the value of Corker’s stake
presumably increased substantially days after his investment.
Wells Fargo is also a major lender to CBL & Associates, a Chattanooga REIT whose relationship
with Corker was at the center of a recent article in the The Wall Street Journal. According to the
Journal, Corker and his family have carried out nearly 70 trades in CBL stock since arriving to the
Senate, several times more than he has in any other security. Several of these trades preceded highly
profitable movements in the share price. Corker has a decades-long relationship with CBL’s
management: He worked for an affiliate of the firm in the 1970s, the firm’s founder served as his
campaign finance chairman, and his campaigns have have received tends of thousands of dollars
from CBL employees.46
CBL executives have regularly referred to their firm’s special relationship with Wells Fargo. One
recent annual report referred to Wells Fargo as the firm’s “lead bank.”47 In a 2011 interview with the
Chattanooga Times Free Press, CBL chairman Charles B. Lebovitz singled out Wells Fargo for helping
prop up the firm during the recent financial crisis.48
Over the last two decades Wells Fargo has provided CBL with financing worth several billion
dollars. The earliest loan uncovered to date came in August 1994, when CBL completed a $75
million credit facility led by Wells Fargo Real Estate Group.49 Since then the bank has awarded loans
to CBL worth up to $1.26 billion. Most recently, on October 16, 2015, Wells Fargo helped CBL
secure a credit facility of $1 billion and close a new $350 million term loan.50 The bank has also
served as the underwriter of least seven CBL stock and securities offerings, the first in 2003 and the
most recent in September of 2015.51
One member of CBL’s board of directors, A. Larry Chapman, is a 37-year veteran of Wells Fargo’s
commercial real estate business, eventually heading the division. He also served as a member of the
Wells Fargo Management Committee. Chapman has served as governor, council member, and
trustee of the Urban Land Institute, a think tank that has been among the leading voices supporting
GSE privatization.52

http://www.mobilecountyal.gov/pdf/meetings/agendas/september_19_2014.pdf
http://www.wsj.com/articles/sen-bob-corker-profits-on-quick-stock-trades-1446596135
47 http://www.snl.com/interactive/lookandfeel/103092/CBL2008Annual.pdf
48 http://www.timesfreepress.com/news/chatter/story/2011/jan/02/mall-men/38027/
49 http://www.snl.com/interactive/lookandfeel/103092/CBL2008Annual.pdf
50 http://www.sec.gov/Archives/edgar/data/910612/000091061215000070/form8-klocandtermloan_oct2.htm
51 http://www.sec.gov/Archives/edgar/data/910612/000119312503042206/dex12.htm
52 http://www.cblproperties.com/cbl.nsf/officers_directors.html
45
46

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May 25, 2016

Wells Fargo appears to have similarly benefited the business fortunes Henry Luken, a Corker backer
and longtime business associate. Luken acquired the majority of Corker’s real estate holdings in
2006, allowing the then-Chattanooga mayor to pump millions of dollars into his Senate campaign
and shed more than $75 million in risky high-interest loans.53
Four of the properties Corker sold to Luken were financed with a subprime loans issued by GE
Capital in 1999. Following the 2006 sale, when the loans came due in 2009, GE Capital refused to
renew the loans with Luken, instead awarding only two six-month extensions that allowed Luken to
remain solvent.54 As the original borrower, Corker likely maintained a contingent liability on the
properties, meaning GE Capital’s refusal to roll over the loans was a threat to the Senator’s financial
well-being.
Luken’s—and likely Corker’s—savior emerged in 2010: Wells Fargo. In March 2010, three months
before the GE Capital extension was to expire, and while the company was technically in default,
Luken announced that he had secured $28 million in new financing from Wells Fargo. The financing
came at a time when, according to Luken’s CEO, no other banks were willing to offer new credit
facilities, and most were pulling back amid the post-crisis credit crunch.55
The Wells Fargo executive who oversaw the Luken loans was Jay Oglesby, who was then the senior
vice president for real estate in the mid-south region, which encompassed Mississippi, Alabama,
Florida Panhandle, Tennessee, Kentucky, and Arkansas.56 This likely means that Luken’s savior also
oversaw Wells Fargo’s financing of the McGowin Park shopping center, where Corker invested in
2014.
In essence, the same bank that helped prop up CBL during the housing crisis performed service for
another of Corker’s close business allies, and in so doing, again protected the Senator’s interests as
well.
Wells Fargo has helped Luken’s business empire in other ways as well. As a secured creditor of
Equity Media Holdings, it signed off on the $18 million sale in 2008 of Retro Television Network by
Equity to Luken Communications. The bargain price of the network, which would subsequently
become one of Luken’s most lucrative assets, was later judged to be fraudulent.57
Corker has been a frequent trader in Wells Fargo stock. His personal financial disclosures include a
total of 14 trades of Wells Fargo stock, and he listed Well Fargo stock as an asset in 2006 and 2007.58
In 2006 he held between $80,000 and $200,000. Corker also reported holding between $1,000 and
$15,000 of Wachovia stock in 2006.

http://www.chattanoogan.com/2006/1/5/78144/Corker-Selling-Many-Business-Holdings.aspx
http://www.timesfreepress.com/news/businesstopstory/story/2010/mar/27/fresh-credit-flows-to-luken/11040/
55 http://www.timesfreepress.com/news/businesstopstory/story/2010/mar/27/fresh-credit-flows-to-luken/11040/
56 https://www.linkedin.com/in/jay-oglesby-22a8954
http://www.timesfreepress.com/news/businesstopstory/story/2010/mar/27/fresh-credit-flows-to-luken/11040/
57 http://www.timesfreepress.com/news/business/aroundregion/story/2013/jun/27/luken-to-fight-bankruptcyverditc/111810/
58 http://www.scribd.com/doc/289155471/Campaign-for-Accountability-Requests-SEC-and-Ethics-Investigation-ofSen-Robert-Corker-R-TN-for-Insider-Trading
https://www.opensecrets.org/pfds/assets.php?cid=N00027441&year=2006
53
54

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Corker’s biggest sale of Wells Fargo stock was particularly well-timed. After Corker sold between
$30,000 and $100,000 of Wells Fargo stock on August 6 and 7, 2007, its value dropped more than
20% within five months of the sale and more than 25% within ten months.
Wells Fargo and GSE Policy
Wells Fargo stands to be the biggest beneficiary in the event of the disappearance of Fannie Mae
and Freddie Mac, the signature legislative priority of Bob Corker. While the bank appears to have
been careful to avoid high-profile advocacy for a fundamental reform of the American economy that
would ultimately confer upon it trillions of dollars in new revenues, Wells has quietly pushed for a
smaller role for Fannie and Freddie in Congressional hearings and White House meetings. While
these mini-reforms would not shift the system in Wells Fargo’s direction as drastically as would the
GSEs’ disappearance, cumulatively they could have a similar effect.
Wells Fargo’s potential benefit from the reduction or elimination of the GSEs stems largely from its
size: It is the nation’s largest mortgage lender and its largest mortgage servicer by a wide margin. It
originated $62 billion in mortgage loans during the second quarter of 2015, 15% of the total market,
more than double the runner-up (JP Morgan Chase), and almost as much as the next three banks
combined. Its mortgage servicing portfolio is also the largest in the country: At nearly $1.7 trillion,
its portfolio is more than $600 billion larger than any other bank’s in the US.59
Wells Fargo appears to have been laying the groundwork for absorbing Fannie and Freddie’s role in
the housing finance system since the earliest days of the Great Recession. As early as 2008, it was
publishing research arguing that the GSEs helped contribute to the housing crisis and were a burden
on public finances, offering a preview of the arguments used to justify Corker’s bill several years
later.60 According to Wells managing director Glenn Schultz, the report’s author:
The GSEs are using government-subsidized debt to fund their arbitrage portfolios that, in turn, subsidized
their below-market guarantee fees. This may have contributed to the increased levels of risk in the GSEs'
arbitrage portfolios.61
Schultz also offered a rosy description of a post-GSE world:
The GSEs act as a conduit; they don't originate or service loans. Instead, they create liquidity for the
mortgage market by re-underwriting and wrapping these securities. We have calculated the GSE advance
rates in the absence of the GSEs based upon a self-insuring structure with upfront overcollateralization and
excess spread…A structure of this nature minimizes government liability while, at the same time, provides
government support to maintain the desired depth of investor participation in the mortgage market.62
Schultz’s superiors made similar arguments before policymakers. Michael Heid, the longtime
president of Wells Fargo Home Mortgage, appeared before the US House of Representatives
Financial Services Committee in September 2010. He closed his statement with a sketch of the ideal

http://www.prnewswire.com/news-releases/biggest-mortgage-lenders-and-servicers-in-q2-300142113.html
http://www.structuredfinancenews.com/issues/2008_65/-197376-1.html
61 http://www.asreport.com/issues/2008_65/-197376-1.html
62 http://www.asreport.com/issues/2008_65/-197376-1.html
59
60

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post-conservatorship system, which included several areas in which private entities like Wells Fargo
could assume the GSEs’ role.63 Heid subsequently spoke about GSE reform on multiple occasions
before Congressional bodies, and when he retired in October 2015, his career was celebrated on the
House floor by Rep. David Young (R-Iowa).64
Meeting logs from several different agencies also demonstrate Wells Fargo’s persistent access to
high-level officials. Heid, for example, visited the White House approximately 14 times during the
Obama administration. Heid typically met with high-ranking housing and economic officials,
including several figures reputedly pushing Fannie and Freddie’s demise, including Jim Parrott and
Gene Sperling.
The meetings were virtually always small affairs, indicating a substantive dialog about policy issues
rather than a pro-forma event.65 On April 26 of 2012, for example, Heid, Wells lawyer Daniel
Archer, and Wells head of Capital Markets for Home Lending John Gibbons, met privately in the
White House with Jim Parrott, Treasury’s Janice Eberly, and HUD senior advisor Robert C. “Bob”
Ryan – who later that year would take a top job in the Washington office of Wells. The same day,
Heid, Archer and Gibbons also met privately with Gene Sperling.
Industry analysts have noted Wells Fargo’s potential gains in the event of Fannie and Freddie’s
disappearance. In 2011, days after the Obama administration signaled its preference to wind down
the GSEs, a report from investment bank Stifel Nicolaus pointed to Wells Fargo as the chief
beneficiary of such a policy shift.66
Throughout the post-recession period, Wells Fargo’s lobbying campaign continued to progress. In
2011 the New York Times reported that Wells Fargo was leading a charge to permit private banks to
bundle mortgages into securities and issue the guarantees provided by Fannie and Freddie; since the
guarantee fees represent a substantial portion of the GSEs’ revenue, this plan would allow Wells
Fargo to swallow a huge share of a protected market. The same article noted that Wells Fargo also
pushed plans to auction off the GSEs’ $1.5 trillion portfolio to private companies like Wells.
According to John Gibbons, Wells Fargo Home Mortgage’s executive vice president of capital
markets, “In general we still support those positions because we think they are ways of bringing
private capital back into mortgage finance.”67
Wells also weighed in early on the Common Securitization Platform. On December 3, 2012,
Gibbons sent FHFA chief Ed DeMarco a 16-page letter responding to FHFA’s October 2012 white
paper outlining a framework for the new housing finance securitization platform.68 In the document,
which is written in a tone of ongoing collaboration between the two entities, Gibbon hails the plan
as “logical extension of its other initiatives to harmonize the certain aspects of the GSEs’

http://financialservices.house.gov/media/file/hearings/111/heid092910.pdf
https://www.congress.gov/crec/2015/10/28/CREC-2015-10-28-pt1-PgE1557-4.pdf
https://www.gpo.gov/fdsys/pkg/CHRG-111hhrg63041/html/CHRG-111hhrg63041.htm
65 https://open.whitehouse.gov/dataset/White-House-Visitor-Records-Requests/p86s-ychb
66 http://www.thestreet.com/story/11007677/1/wells-fargo-may-profit-from-gse-reform-analyst.html
67 http://www.nytimes.com/2011/01/21/business/21banks.html?_r=1
68 http://www.fhfa.gov/PolicyProgramsResearch/Research/Pages/Building-a-New-Infrastructure-for-the-SecondaryMortgage-Market.aspx
63
64

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operation,” and repeatedly calls for reforms that would lessen the role of the GSEs in the housing
finance market.69
In 2013 Bob Corker introduced his landmark legislative proposal seeking the disappearance of
Fannie Mae and Freddie Mac, in effect promising a historic shift in market share toward Wells
Fargo. Known colloquially as Corker-Warner, the bill has since served as a legislative starting point
for market-friendly approaches to GSE reform. Corker is also the movement’s foremost
Congressional champion, appearing regularly at events and on television to talk up the need to wind
down the GSEs.70
In 2013, following the introduction of Corker-Warner, Wells Fargo published a report promoting
piecemeal changes during the five-year implementation of the GSE wind-down that the new bill
contemplated. Among other suggestions, the report proposed to increase Fannie and Freddie
guarantee fees and to lower the conforming loan limit. Both modifications would help make GSE
services less competitive, and therefore “reduce the GSE footprint and help crowd-in private
markets to return.”71
Like former government officials like Gene Sperling and Jim Parrott, Wells Fargo has also continued
to push for the government’s implementation of the common securitization platform in recent
months. In 2015, the bank celebrated the GSEs’ creation of Common Securitization Solutions, or
CSS, which is set up to issue a common GSE bond.72 According to bank report, “some of the CSS’s
new policies and procedures may be adopted by the private sector in the future, which could assist
in the restart of the private-label securitization market.”73
The revolving door connecting Wells Fargo to key legislative and executive posts provides further
evidence of the bank’s influence over the housing policymaking apparatus.
Among the most egregious examples is Robert C. “Bob” Ryan, who worked from 2009-2012 as
chief risk officer for the Federal Housing Administration, then acting FHA Administrator, and
finally “senior advisor” to HUD Sec. Shaun Donovan. Among other things, Ryan oversaw a massive
FHA foreclosure-abuse settlement with Wells and other banks. He then went off to Wells Fargo
Home Mortgage to “coordinate strategy with industry trade groups and consult with policy makers
on a range of housing-finance issues.”74 His superiors were Michael Heid and John Gibbon.75
At a Bipartisan Policy Center forum on housing finance reform in October 2013, Ryan called for
chartering new mortgage guarantors chartered by private shareholders and for the Common

http://www.fhfa.gov/PolicyProgramsResearch/Policy/Documents/SecuritizationInfrastructure/12.03.2012.Wells_Fargo_Comment_on_Securitization_White_Paper.pdf
70 http://www.marketwatch.com/story/sen-bob-corker-says-investors-should-short-fannie-and-freddie-2015-10-07
http://bipartisanpolicy.org/press-release/senators-bob-corker-and-mark-warner-to-headline-housing-finance-reformevent/
71 http://www.housingwire.com/blogs/1-rewired/post/wells-fargo-theres-simpler-way-shrink-gses
72 http://www.housingwire.com/articles/31937-fannie-freddie-form-new-company-to-develop-single-gse-bond
73 http://www.housingwire.com/articles/32453-wells-fargos-7-housing-predictions-for-2015
74
http://blogs.wsj.com/developments/2012/12/10/obama-housing-official-to-join-wells-fargo/
75 http://www.fhfa.gov/Media/PublicAffairs/Pages/Federal-Housing-Finance-Agency-Director-Mel-Watt-AnnouncesFour-Staff-Appointments.aspx
69

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Securitization Platform.76 Three months later in January 2014, Ryan went to FHFA where he has
pushed for the Common Securitization Platform. At a BPC forum in October 2015 he called for
GSE reform.77 Ryan is a leading advocate for a FHFA program known as “risk sharing,” which
involves Fannie and Freddie selling off some of the risk from the mortgage they insure. The best
known of these risk-sharing offerings are Fannie’s “Connecticut Avenue Securities,” for which Wells
is frequently a lead manager.78
Ryan’s case is exceptional but not unusual. Both during his current stint as the head of the Mortgage
Bankers Association and in his prior role as the chief of the FHA, Dave Stevens has developed a
reputation as being one of the most persistent backers of Fannie and Freddie’s disappearance. Prior
to joining the Obama administration in 2009, Stevens spent a year working in the wholesale lending
division of Wells Fargo Home Mortgage.79 As with Ryan, his superiors would have included both
Heid and Gibbon.
Another noteworthy case is that of Michelle Maiwurm, who left a post as senior policy advisor to
Sen. Mark Warner in 2015 to serve as a vice president for capital markets at Wells Fargo.80 Maiwurm
served as Warner’s point person on GSE issues, and essentially co-wrote the legislation that Warner
later co-sponsored with Corker. According to a Warner spokesperson, “Nobody in Sen. Warner’s
office understands capital markets and the GSEs better than Michelle, or cares about the future of
housing finance more…She spent many days, nights and weeks meeting with countless stakeholders
to make sure that the Senate got GSE reform right.”81
Wells Fargo and Corker’s Political Operation
While Wells Fargo’s support for Corker lies primarily in financing projects and businesses in which
Corker had a stake, the bank and its executives have also worked to advance his political fortunes.
Corker has longstanding political ties to Aon Miller, a former Wells Fargo Securities broker from
Chattanooga. Miller donated to Corker’s campaign on at least two occasions, and the two men are
members of the same Chattanooga-area golf club, the Honors Course.82
After leaving Wells Fargo in 2011, Miller and another Wells alumna founded AM Investment
Strategies in Chattanooga, which is based in a downtown building owned by Corker.83 One of the

http://www.sifma.org/members/hearings.aspx?id=8589945900
http://www.sifma.org/members/hearings.aspx?id=8589956879
78 http://www.fanniemae.com/portal/about-us/media/financial-news/2016/6365.html
76
77

https://www.linkedin.com/in/dhstevens
https://www.linkedin.com/in/michelle-maiwurm-a995476
81 http://www.housingwire.com/influentialwomen/2014/MichelleMaiwurm
82 http://www.timesfreepress.com/news/sports/local/story/2013/jun/24/honors-honors-fox-withmembership/111560/
http://sceniccity.proboards.com/thread/27625/honors-course-caddy-talks-corker
http://www.campaignmoney.com/political/contributions/aon-miller.asp?cycle=06
http://www.campaignmoney.com/political/contributions/aon-miller.asp?cycle=10
83 http://brokercheck.finra.org/Report/Download/41906068
http://www.amillerinvest.com/default.asp?P=981762
79
80

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firm’s principal clients appears to be Corker’s campaign. While the total amount invested is
unknown, figures suggest that Corker has placed millions in campaign contributions into the hands
of Miller’s firm.84
In September 2014, Miller was disciplined by the Financial Industry Regulatory Authority for
investing his customers in private securities that had not been approved by his employer.85 The
decisions was upheld in late 2015 and his license is now suspended. Corker’s campaign committee
filings with the Federal Election Commission for the current electoral cycle lists $172,400 in
earnings from interest, dividends, and gains from an investment account held at AM Investment
Partners.
While campaign committees often invest their war chests in the market, usually they place the
money in an index fund or a similarly conservative vehicle, much like the account Corker has at
Raymond James. Investing millions with a small firm owned by a relatively unknown donor,
especially one who has a FINRA disclosure event, is atypical.
Corker’s campaigns have received thousands of dollars from Wells Fargo and its employees over the
course of his career, particularly during Corker’s early years in the Senate. After Corker was elected
in 2006, Wells Fargo’s PAC donated $7,000 to Corker during the 2008 cycle (11th most among
senators), $5,000 during the 2010 cycle (seventh most among senators), and $500 during the 2012
cycle.86 The PAC for Wachovia, which was acquired by Wells Fargo in 2008, also donated $1,000
during the 2006 cycle and $5,000 during the 2008 cycle.
During his Senatorial career, Corker has also received contributions worth $3,000 from six Wells
Fargo executives.87 Nashville-based executive vice president Sam Belk is the most prolific donor,
having given $1,250 in three different donations from 2006 to 2011.88 Aon Miller donated $250 on
September 2, 2010, and another $250 in 2006. Corker also received six donations worth $3,750 from
former employees of Wachovia between 2006 and 2012.89
Corker has received an additional $5,600 from lobbyists who have represented Wells Fargo. All of
the donations came in 2009, from the employees of three different firms: Jenkins Hill Consulting,
Podesta Group, and G. Hunter Bates.90 The donations are clustered around certain time periods and

http://docquery.fec.gov/cgi-bin/paper_forms/C00430462/1048587/sa/15
http://disciplinaryactions.finra.org/Search/ViewDocument/37447
http://brokercheck.finra.org/Report/Download/41898057
84
85
86

http://www.opensecrets.org/politicians/pacs.php?cycle=2008&cid=N00027441&sector=F&seclong=Finance%2C+Ins
urance+%26+Real+Estate&cat=F03&induslong=Commercial+Banks&newMem=N
http://www.opensecrets.org/pacs/pacgot.php?cmte=C00034595&cycle=2008
87

http://www.opensecrets.org/indivs/search.php?name=&cycle=All&sort=R&state=&zip=&employ=wells+fargo&can
d=corker&submit=Submit
88 https://www.linkedin.com/in/sam-belk-7142b42
89

http://www.opensecrets.org/indivs/search.php?name=&cycle=All&sort=R&state=&zip=&employ=wachovia&cand=
corker&submit=Submit
90

http://www.opensecrets.org/politicians/include/lobbyists_pop.php?cycle=2012&id=n00027441&org=Wells+Fargo&
mem=Bob+Corker&type=I

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Bob Corker

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most are for the same amount, suggesting that the lobbyists participated in Corker fundraisers.
Two key former staffers have professional ties to Wells Fargo or Wachovia. Before David Armand
DeKeyser served the senator’s first chief-of-staff when Corker took office in 2007, he was the
executive director of government relations at Kilpatrick Stockton, where he lobbied for Wells
Fargo.91
Michael Bright, who Corker hired as a senior financial policy advisor in November 2010 and was
reportedly a chief author of the Corker-Warner housing finance reform legislation, was a senior
trader at Wachovia between 2006 and 2008, where he ran the bank’s mortgage derivative trading
division.92 Many of Bright’s associates at Wachovia presumably continued at Wells Fargo after the
2008 merger.
Over the course of his Senatorial career, Wells Fargo has bolstered Bob Corker’s personal financial
portfolio in a number of ways: It has financed a development project in which Corker is a principal
investor; it has bailed out a business associate of Corker’s, thereby saving Corker from a contingent
liability on several property loans; and it extended loans worth billions to a REIT owned by Corker
backers, the same firm where Corker has purchased tens of millions of dollars in stock.

Corker’s Personal Financial Disclosures, filed with the Senate Ethics Committee during Corker’s
campaign, indicate that the amount of income derived from Corker’s properties had dropped by
millions of dollars in the year before Luken’s purchase. The same properties were also saddled with
more than $100 million in liabilities, many of them subprime loans that indicated a distressed
financial situation.93
Wells Fargo Regulatory and Criminal Cases
Wells Fargo has a long history of reckless lending practices, which has landed it in trouble with
federal, state and local governments. For instance, On April 12, the FDIC found that Wells Fargo
had made “material errors…that undermine confidence” in its living will plan for bankruptcy
preparation.94 Regulators found that the bank’s “lack of effective resolution planning governance
raises concerns regarding quality control, senior management oversight, and recovery and resolution
planning staffing” and that its findings “call into question the extent to which there was appropriate
internal review and coordination.”95 The agency required Wells Fargo to rewrite the plan to be
compliant with the 2010 Dodd-Frank Act.96
The April finding follows a string of government actions against Wells Fargo for misbehavior in its
home lending business. In February 2016 the bank announced a $1.2 billion settlement of a 2012

http://www.opensecrets.org/lobby/lobbyist.php?id=Y0000023558L&year=2005
https://www.americansecuritization.com/uploadedFiles/ASF_Site/Events/Speaker_Bios/MichaelBrightBio.pdf
93 https://www.legistorm.com/showPdf/ls_disclosure-member-2006-annual-report-814.pdf
https://www.legistorm.com/showPdf/ls_disclosure-member-2006-annual-amendment-814.pdf
https://www.legistorm.com/showPdf/ls_disclosure-member-2005-annual-report-814.pdf
https://www.legistorm.com/showPdf/ls_disclosure-member-2005-annual-amendment-814.pdf
94 http://www.wsj.com/articles/regulators-reject-living-wills-of-five-huge-u-s-banks-1460548801
95 http://www.wsj.com/articles/in-a-surprise-wells-fargos-living-will-plan-is-rejected-1460548807
96 http://www.wsj.com/articles/in-a-surprise-wells-fargos-living-will-plan-is-rejected-1460548807
91
92

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federal lawsuit, in which it admitted responsibility for falsely certifying that many of its home loans
qualified for Federal Housing Administration insurance.97 Well Fargo was aware that it has
misclassified these loans but it intentionally did not report the deficiencies to regulators before it
filed insurance claims with the government. 98
The bank has also settled cases across the country where it has been accused of predatory and
discriminatory lending. In July 2012 the bank and the Department of Justice (DOJ) reached the
second largest fair lending settlement in history when Wells Fargo agreed to pay more than $175
million to resolve claims of discrimination against 34,000 qualified African-American and Hispanic
borrowers, whom it had steered into subprime mortgages or otherwise forced to pay higher fees and
rates than white borrowers.99
The deal included settlements of similar discrimination claims with other state and local jurisdictions,
including the City of Baltimore, the State of Illinois, and the Pennsylvania Human Rights
Commission.100 In the Baltimore case, Wells Fargo employees were alleged to have referred to these
subprime loans as “ghetto loans” and used racial slurs to describe customers.101
In May 2012 the bank settled a lending discrimination case with Memphis and Shelby County,
Tennessee by pledging $425 million in new loans and financial assistance to local residents, in
addition to agreeing to pay $3 million to the Memphis and $4.5 million in grants for mortgage
payments and home renovations.102 Oakland and Miami also have ongoing discrimination cases
against the lender.103
In 2010 Wells Fargo reached settlement agreements with attorneys general in Arizona, California
Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington after it had accepted
responsibility for deceptively marketed adjustable-rate loans known as “pick-a-pay” loans.104 These
loans provided the option to initially pay less than the interest due, but borrowers could not afford
the ballooning payments that later contributed to a wave of foreclosures from 2007 to 2009. The
loans had been originated by World Savings and Wachovia, two banks that Wells Fargo acquired.105
The bank agreed to grant loan modifications that could potentially be worth up to $2.7 billion, and it

http://www.nytimes.com/2016/02/04/business/dealbook/wells-fargo-to-pay-1-2-billion-in-mortgagesettlement.html?_r=0
http://www.reuters.com/article/us-wellsfargo-settlement-idUSKCN0X52HK
98 http://www.nytimes.com/2016/02/04/business/dealbook/wells-fargo-to-pay-1-2-billion-in-mortgagesettlement.html?_r=0
http://www.reuters.com/article/us-wellsfargo-settlement-idUSKCN0X52HK
99 https://www.justice.gov/opa/pr/justice-department-reaches-settlement-wells-fargo-resulting-more-175-million-relief
100 http://www.nytimes.com/2012/07/13/business/wells-fargo-to-settle-mortgage-discrimination-charges.html
http://articles.baltimoresun.com/2012-07-12/news/bs-md-ci-wells-fargo-20120712_1_mike-heid-wells-fargo-homemortgage-subprime-mortgages
http://illinoisattorneygeneral.gov/pressroom/2012_07/20120712.html
http://files.painteractive.org/pr/PA%20Human%20Relations%20Commission/2013/201305/Philadelphia%20Minority%20Homebuyers%20to%20Receive%20$3.2%20Million%20in%20Wells%20Fargo%20Pre
datory%20Lending%20Settlement.pdf
101 https://consumerist.com/2009/06/08/affidavits-on-how-wells-fargo-gave-ghetto-loans-to-mud-people/
102 http://money.cnn.com/2012/05/30/news/companies/wells-fargo-memphis/
103 http://qz.com/510069/wells-fargo-is-getting-sued-for-mortgage-discrimination-again/
104 http://money.cnn.com/2010/12/21/real_estate/wells_fargo_settlement/
105 https://oag.ca.gov/news/press-releases/brown-reaches-settlement-wells-fargo-worth-more-2-billion-californiansrisky
97

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May 25, 2016

additionally paid $50 million to members of the class action settlement.106 In April 2015 a U.S.
District Court judge in Northern California found that the bank had breached this settlement by not
properly evaluating homeowners who applied for loan assistance to avoid foreclosures.107
Wells Fargo was one of five mortgage servicers included in a joint state-federal settlement that was
considered the largest consumer financial protection settlement in US history.108 The $25 billion
agreement, which in addition to the DOJ included 49 state attorneys general and the District of
Columbia, resolved mortgage loan servicing and foreclosure abuses such as the use of robo-signed
affidavits in foreclosure proceedings, deceptive practices in the offering of loan modifications,
failures to offer non-foreclosure alternatives before foreclosing on borrowers with federally insured
mortgages, and filing improper documentation in federal bankruptcy court.109
The bank was also one of five to settle with the Department of Justice in February 2015 for illegally
foreclosing on members of the military that were protected under the Servicemembers Civil Relief
Act.110 Out of the $123.4 million the five banks owed 952 service members, Wells Fargo was forced
to pay $28.4 million to 239 of them.111
In November 2015 Wells Fargo reached a $81.6 million settlement with DOJ for failing to provide
homeowners in bankruptcy with legally required notices that would allow them to challenge the
accuracy of mortgage payment increases.112
The same month, Wells was slapped with a “cease and desist” order by the Office of the
Comptroller of the Currency for failing to address problems with money laundering.113 The action
appears to be at least partly linked to the role played by Wells in a massive Malaysian moneylaundering scandal now under FBI investigation.114

http://www.reuters.com/article/us-usa-wells-settlement-idUSKBN0N72MM20150416
http://www.reuters.com/article/us-usa-wells-settlement-idUSKBN0N72MM20150416
108 http://www.nationalmortgagesettlement.com/about
109 https://www.justice.gov/opa/pr/federal-government-and-state-attorneys-general-reach-25-billion-agreement-fivelargest
110 https://www.justice.gov/opa/pr/service-members-receive-over-123-million-unlawful-foreclosures-underservicemembers-civil
111 https://www.justice.gov/opa/pr/service-members-receive-over-123-million-unlawful-foreclosures-underservicemembers-civil
112 https://www.justice.gov/opa/pr/us-trustee-program-reaches-816-million-settlement-wells-fargo-bank-na-protecthomeowners
113 http://www.occ.gov/static/enforcement-actions/ea2015-125.pdf
114 http://www.bloomberg.com/news/articles/2016-04-01/jpmorgan-wells-fargo-asked-by-u-s-to-save-records-tied-to1mdb
106
107

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May 25, 2016

Henry G. Luken III
Born: July 1959
From: Kentucky
Family Status: Married to Kelly Luken, at least one child
Career Highlights:
• Owner of Luken Holdings, 1999-Present
• Chairman of Covista Communications, 2001-2013
• Owner of Luken Communications, 2008-Present
Executive Summary
After Chattanooga businessman Henry Luken rescued Sen. Bob Corker from his teetering real estate
empire in 2006, Corker multiplied his net worth dramatically while serving in the Senate. During the
same period, Corker also appears to have used his Senate seat to further Luken’s business interests
on various occasions.
Corker’s January 2006 sale of the vast majority of his property holdings to Luken relieved Corker of
a substantial burden. Personal Financial Disclosures (PFDs) filed with the Senate indicate that
Corker’s real estate companies suffered substantial revenues losses and were saddled with hundreds
of millions of dollars of debt, much of it at the sort of sub-prime rates that were vulnerable in the
onset of the 2008 financial crisis. In effect, by shelling out between $11.2 million and $55.5 million
for the holdings, Luken saved the soon-to-be Senator from the effects of the coming real estate
collapse and consequent credit crunch.
Corker diverted the proceeds of this transaction into two separate functions, both vitally important
to his financial and political future: First, he used $4.2 million, or nearly a quarter of all his spending,
to finance his 2006 Senate campaign, without which his narrow victory over Harold Ford would
likely not have been possible. Corker also sank much of his capital into Chattanooga hedge funds
like Pointer Management, which has vastly increased his net worth while serving in the Senate.
While in office, Corker has taken a series of actions that boosted Luken’s fortunes. He sent letters to
the FCC urging regulatory changes that would protect the profits of Luken’s scores of low-power
TV stations and broadcast networks. Corker co-sponsored multiple bills that would benefit Luken’s
telecom businesses. Corker also spent years as mayor and senator encouraging Volkswagen to build
a massive plant in Chattanooga, which inflated the value of several of Luken’s nearby properties.
Corker and Luken’s ties predate the 2006 sale. While serving as mayor of Chattanooga from 2001 to
2005, Corker launched, and then aborted, a citywide fiber optic initiative, which was allegedly set up
to send business to Luken’s Covista Communications. Corker himself was an investor in the same
firm, a fact not disclosed at the time.
Luken is part of a close-knit group of Chattanooga businessmen that has enabled Corker’s political
career and helped make him a rich man. Both Pointer Management and its co-founder Thorpe
McKenzie are longtime investors in Luken’s companies, and the men are partners in a Nevada
racing company. Like McKenzie and several other Chattanooga hedge fund investors, Luken was
one of Corker’s earliest supporters, donating $8,000 along with his wife weeks after he announced
his candidacy in November 2004.

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Luken’s Ties to Chattanooga
After founding and selling a successful phone company in the 1990s, Luken bought a new telecom
venture and moved it to Chattanooga in the early 2000s, just after Bob Corker had been elected
mayor. He forged a broadband partnership with Corker’s administration that would have yielded
Luken substantial revenues had the technology behind it worked.
Although that initiative failed, Luken remained a key member of the Corker financial circle. He was
among the earliest supporters of Corker’s next political move, his campaign for the Senate. The
relationship they built during this time period laid the groundwork for their massive 2006 real estate
transaction, and it also established the basis for an apparent quid pro quo under which Corker
repeatedly pushed for policies that would advance Luken’s financial interests.
Professional Background
Unlike most members of Chattanooga’s business elite, Luken is not a member of a wealthy local
family. The Kentucky native dropped out of college twice in the 1970s, the first time from Ohio
State after the school's registrar put him in the wrong classes and the second time from a small
school in his home state after a car accident.115 He worked as a computer programmer before going
into business on his own in the late 1980s.116
Luken founded a computer systems firm called Telco Development Group Inc. in 1987 and a phone
billing company called Tel-Labs Inc. in 1991.117 Two years after starting Tel-Labs, Luken and his
business partner took out a $25 million loan to start their own long-distance company called Telco
Communications.118 Luken also founded the Long Distance Wholesale Club in 1993, which would
eventually merge with Telco Communications in 1995.119 Telco would later merge with Luken’s
billing company.
Telco used the Long Distance Wholesale Club and other brands to market what was one of the first
dial-around long distance phone services in the U.S., meaning that customers did not have to sign up
with Telco for service, they just needed to enter a five-digit access code using their existing
provider.120 Luken and his partners sold Telco to Excel Communications Inc. of Dallas in 1997 for
$600 million in cash and stock. He briefly became a top executive at Excel until he resigned in
December 1997.121 One asset that made Telco so valuable was its advanced billing software system
developed by Luken. His 21% ownership of the company should have netted him $99 million in

http://www.timesfreepress.com/news/edge/story/2015/jul/01/no-degree-no-problem/312467/
http://www.timesfreepress.com/news/edge/story/2015/jul/01/no-degree-no-problem/312467/
117 http://www.prleap.com/pr/240790/announcing-christensen-shipyards-llc
117 https://www.washingtonpost.com/archive/politics/1997/06/16/cashing-in-when-opportunity-knocks/99e53b3826bd-42cd-a62a-79d330310868/
118 https://www.washingtonpost.com/archive/politics/1997/06/16/cashing-in-when-opportunity-knocks/99e53b3826bd-42cd-a62a-79d330310868/
119 https://www.washingtonpost.com/archive/politics/1997/06/16/cashing-in-when-opportunity-knocks/99e53b3826bd-42cd-a62a-79d330310868/
120 http://www.utc.edu/college-business/news-events/annual-events/hall-of-fame/hof-2003.php
121 https://www.sec.gov/Archives/edgar/containers/fix042/1007323/0000930661-97-002941.txt
115
116

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May 25, 2016

cash and $105 million worth of Excel stock, but he was obligated to give up $15 million in cash and
$16 million in stock as part of a divorce settlement.122
Covista Communications
Shortly after his Excel exit, Luken purchased approximately 30% of Little Falls, NJ-based Total Tel
USA Communications Inc.123 The company announced his election as a director in February 1999.
124
Approximately a year later, Total Tel changed its name to Covista Communications. Covista was
a phone, Internet and data provider that specialized in long distance but also offered toll-free, calling
card, frame relay, Internet access, VPN, directory assistance, and teleconferencing services.125
Luken was elected chairman of the board of Covista in February 2001, and in July 2001 he merged
the company with Capsule Communications, a telecom company he partially acquired the same
year.126 Luken purchased his stock in Capsule from Walt Anderson, who in 2006 was convicted of
the largest tax evasion scheme in U.S. history.127 The SEC filing for the transaction stated that Luken
had acquired the stock from Anderson’s company Gold & Appel “to accommodate and assist a
business associate in personal and financial affairs.”128
Luken’s relationship with Anderson, which was discussed briefly in a New York Times article in 2005,
went well beyond the Capsule purchase.129 According to court filings, Anderson also made loans
through Gold & Appel to Luken’s company Bricks in the Sticks, which owned Telco’s headquarters
and a Chattanooga switch site.130 Bankruptcy documents suggest that Anderson held an ownership
stake in Telco.131 He also joined the Covista board of directors at the same time as Luken, serving as
chairman of the board from November 1999 until 2001, when Luken succeeded him. This period
could coincide with Corker’s investment in Covista, meaning the future Senator bought a stake in a
firm run by one of the largest tax evaders in U.S. history.
Luken moved Covista to Chattanooga in 2001, just months after Corker took office as mayor of the
city.132 He later said that he decided to move to the Chattanooga area because of the tax incentives in

https://www.washingtonpost.com/archive/politics/1997/06/16/cashing-in-when-opportunity-knocks/99e53b3826bd-42cd-a62a-79d330310868/
123 http://www.utc.edu/college-business/news-events/annual-events/hall-of-fame/hof-2003.php
124 https://www.sec.gov/Archives/edgar/data/34497/000095011701500155/0000950117-01-500155.txt
125 http://www.chattanoogan.com/2001/10/10/13629/Henry-Luken-s-Covista-Moving.aspx
126 http://www.prnewswire.com/news-releases/covista-communications-inc-and-capsule-communications-incannounce-agreement-to-merge-71392372.html
https://www.sec.gov/Archives/edgar/data/1113227/000103605001500273/d10k.txt
127 https://www.linkedin.com/in/walt-anderson-37833256
http://www.espritdata.com/#!about/c20r9
128 http://edgar.sec.gov/Archives/edgar/data/1113227/000107111801000007/0001071118-01-000007-0001.txt
129 http://www.nytimes.com/2005/03/02/business/man-of-many-names-now-called-no-1-tax-cheat.html
130 In re: Gold & Appel Transfer S.A., United States Bankruptcy Court for the District of Columbia, Case No. 05-00775,
Motion Of Meade Malone, Official Liquidator For Gold & Appel Transfer S.A., For Order Requiring Examination Of,
And Permitting Production Of Documents From, Bricks In The Sticks, LTD., And Henry Luken
https://www.sec.gov/Archives/edgar/data/1013159/0001026777-97-000014.txt
131 In re: Gold & Appel Transfer S.A., United States Bankruptcy Court for the District of Columbia, Case No. 05-00775,
Motion Of Meade Malone, Official Liquidator For Gold & Appel Transfer S.A., For Order Requiring Examination Of,
And Permitting Production Of Documents From, Bricks In The Sticks, LTD., And Henry Luken
132 https://www.sec.gov/Archives/edgar/data/34497/000095011701500155/0000950117-01-500155.txt
http://www.chattanoogan.com/2001/10/10/13629/Henry-Luken-s-Covista-Moving.aspx
122

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eastern Tennessee.133 As part of the move to Chattanooga, it set up a 200-person call center and a $2
million switching center in town.
It is likely that Luken held onto his interest in Covista, which was delisted from the NY stock
exchange and stopped making SEC filings in 2005, until the company was sold to Atlanta-based
Birch Communications in January 2013.134 It is also possible that he obtained equity in Birch
following the sale of Covista. Luken cited his affiliation with Covista as recently as December 2011,
when he listed the company as his employer in a donation to the Congressional campaign of Weston
Wamp.
Covista disclosed in a 2002 filing with the SEC that it had recently renegotiated a revolving $2
million credit facility with Wells Fargo that would expire in 2004.135 The financing agreement
appears to be the first of several loan agreements that Luken’s businesses would make with the bank.
Luken’s favorable treatment by Wells Fargo is one of several examples of the bank’s support for
Corker and his business allies.
Initial Ties to the Corker Network
Covista Ownership
Bob Corker was an investor in Covista while serving as mayor of Chattanooga. According to
Corker’s Senate financial disclosure for FY 2004, the first year he filed one as a Senate candidate, he
held publically traded Covista stock. He reported that the asset did not have any value, which
suggests that he had sold his stake in the company when he filed his disclosure. However, since he
never reported the actual sale of the stock, it is impossible to determine when he sold it or at what
price.
MetroNet
In 2002 Corker appears to have made a failed attempt to enrich Covista through a partnership with
Corker’s mayoral administration. That year, Corker announced a non-profit initiative called
MetroNet, which would attempt to lure tech companies to the area by utilizing the city’s existing
fiber-optic infrastructure to offer fast data speeds to local ISPs at discounted rates.136
In the project’s early stages, Corker said that Luken had been supplying his expertise to the
initiative.137 He donated switching devices to be installed inside customer buildings and also offered

https://issuu.com/chattanoogamagazine/docs/october_november
http://www.prnewswire.com/news-releases/birch-signs-agreement-to-acquire-covista-communications-assets185424152.html
135 http://www.sec.gov/Archives/edgar/data/34497/000095011702001488/0000950117-02-001488.txt
136 http://www.chattanoogan.com/2003/5/16/36587/MetroNet-Folded-Into-New-EPB-Internet.aspx
http://www.chattanoogan.com/2002/7/12/23991/Three-Local-ISPs-Sign-Up-With-MetroNet.aspx
137 http://www.chattanoogan.com/2002/4/1/19949/Metronet-Would-Help-Guide-Fiberoptic.aspx
133
134

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support services.138 Luken also provided $25,000 in seed capital and was named to MetroNet’s board
of directors.139
Critics of the initiative alleged that it could serve as a way for the city to give its fiber-optic network
to Covista.140 Mike Harrison, the owner of local internet firm Chattanooga Online, criticized
MetroNet for working with “unproven partners” and called it “dependent upon unprofitable and
bankrupt companies for its key services.” 141
The project was short lived, as MetroNet was folded into a new Internet division at the city’s
Electric Power Board (EPB) in May 2003.142 The program had struggled to get off the ground after
the data pipeline provided by Luken did not function properly, and Covista was subsequently
removed from the program.143
Nonetheless, Luken remained a part of Corker’s inner circle and base of support. Like Corker’s
other elite Chattanooga boosters, Luken donated to Corker’s campaign just after he declared his
Senate candidacy: He and his wife Kelly contributed $8,000 to Corker in December 2004, and they
served as members of that campaign’s host committee.144 They gave another $10,000 to Corker in
March 2011.
Thorpe McKenzie
Luken has a longtime relationship with Pointer Management co-founder Thorpe McKenzie, a
prominent Corker donor and an ally of Corker’s dating to the beginning of his political career.
McKenzie joined Covista’s board of directors in January 2003, after purchasing shares worth more
than $1.4 million.145 According to a Covista SEC filing from 2003, both Pointer Management and
the fund’s executive John Stout each separately purchased $250,000 worth of Covista stock in
November of that year.146 Another SEC filing from 2004 states that some of McKenzie’s shares
were owned by Pointer.147 McKenzie and Luken are also directors of Nevada-incorporated Three
Stooges Racing Team, LLC.148
McKenzie, a Lookout Mountain native and Baylor School graduate, is a centerpiece of Corker’s
financial network. Throughout his career, he has worked with Chattanooga business elites like
SunTrust heir Scotty Probasco, L. Hardwick Caldwell, who served as vice chairmen of Corker’s first
senate campaign, and Joseph Davenport III, Pointer Management co-founder and Corker’s

http://www.prnewswire.com/news-releases/chattanooga-competitive-with-nations-technology-hubs-public-privatepartnership-launches-metronet-76279097.html
139 http://www.chattanoogan.com/2002/7/16/24081/City-Council-Approves-MetroNet.aspx
http://www.chattanoogan.com/2002/7/17/24178/MetroNet-Touted-As-Economic-Development.aspx
140 http://www.chattanoogan.com/2002/6/10/22880/Chattanooga-Online-Owner-Says-MetroNet.aspx
141 http://www.chattanoogan.com/2002/6/10/22880/Chattanooga-Online-Owner-Says-MetroNet.aspx
142 http://www.chattanoogan.com/2003/5/16/36587/MetroNet-Folded-Into-New-EPB-Internet.aspx
143 http://www.chattanoogan.com/2003/2/28/33152/MetroNet-Struggling-To-Find-A-Niche.aspx
144 http://www.chattanoogan.com/2004/11/17/58801/Corker-Running-Senate-Campaign-Out-Of.aspx
145 http://www.chattanoogan.com/2003/1/9/30997/Covista-Communications-Announces.aspx
146 https://www.sec.gov/Archives/edgar/data/34497/000095012303013064/y91995sc13dza.txt
147 https://www.sec.gov/Archives/edgar/data/34497/000095011704003426/a38426.txt
148 http://nvsos.gov/sosentitysearch/PrintCorp.aspx?lx8nvq=NmJzaTF%252fQdIzNk8s46FeKA%253d%253d&nt7=0
138

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campaign vice chairman in 2006.149 When McKenzie started his first hedge fund in the 1980s,
Caldwell invested half of his inheritance with McKenzie.
In the early 1990s, Caldwell launched his hedge fund TSWII, while McKenzie and Davenport III
would later form Pointer Management together. Corker has invested millions in each.
Luken’s partnership and friendship with McKenzie served as his entrance into the Chattanooga elite
who helped build Corker’s wealth and his political career. Covista delisted its publically traded stock
in 2005 and stopped submitting SEC filings that year, so it is not clear when or if Pointer,
McKenzie, and Stout sold their shares in the company. If Pointer still held those shares after 2006,
then Corker would have retained a stake in Covista through his investment in Pointer.
Equity Media Holdings and Luken Communications
Luken’s massive TV holdings can be broken up into two symbiotic categories: low-power TV
stations, which depend on government allocations of spectrum, and networks that produce original
content, much of which runs on broadcast television.
Luken has held ownership in broadcast media since at least 1999, when he purchased a stake in three
Arkansas radio stations from Equity Broadcasting Corp. (EBC) for $1.5 million.150 Luken became a
shareholder of EBC and was on the board of directors by 2006.151 EBC’s television holdings
included 26 full-power stations, 37 Class A low-power stations and 69 additional low-power stations
in 33 U.S. markets.152 Equity was also the second-largest affiliate group of Univision networks.
EBC became a publically traded company named Equity Media Holdings in 2007. As the company’s
largest shareholder, Luken was elected as chairman of board, and in February 2008 he was named
president and CEO of the company.153 Equity Media was then the second-largest owner of television
spectrum in the U.S. and planned to supplement its broadcast revenues by leasing some of its
spectrum for other data transmission uses including wireless internet and cell phone service.154 It
also had a digital satellite uplink system that fed programming to affiliates and cable systems from its
central facility.155
One of Equity’s sources of programming was Retro Television Network (RTN), which it sold to the
Luken-owned Luken Communications in June 2008 for $18.5 million.156 Luken had resigned from
his positions at Equity one month earlier, serving just three months as president and CEO.157 Equity
had been experiencing financial difficulties and needed new funding to keep its operations afloat.

http://www.timesfreepress.com/news/local/story/2016/jan/31/silent-partner-thorpe-mckenzie-may-beunknown/347577/
http://www.chattanoogan.com/2004/11/17/58801/Corker-Running-Senate-Campaign-Out-Of.aspx
150 http://americanradiohistory.com/Archive-BC/BC-1999/BC-1999-07-12.pdf
151 https://www.sec.gov/Archives/edgar/data/1327012/000095014407002074/filename1.htm
152 http://www.bizjournals.com/southflorida/stories/2006/04/10/daily17.html
153 https://www.sec.gov/Archives/edgar/data/1327012/000095014407002411/g03197b3e424b3.htm
http://www.rpcp.com/index.php?option=com_content&task=view&id=76&itemid=13
154 https://www.sec.gov/Archives/edgar/data/1327012/000095014407001522/g05678exv99w1.htm
155 https://web.archive.org/web/20080917133653/http://emdaholdings.com/spectrumholdings.html
https://web.archive.org/web/20090305130818/http://emdaholdings.com/broadcastservices.html
156 http://www.broadcastingcable.com/news/programming/equity-media-sells-rtn-ease-crunch/32632
157 http://www.arkansasbusiness.com/article/42690/equity-media-president-ceo-henry-luken-resigns
149

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According to court records filed by Luken, Wells Fargo, one of Equity’s creditors, “specifically
encouraged and approved the transaction.”158 Luken later said that Equity used most of the funds
from the sale to eliminate Wells Fargo’s first lien position.159
Equity Media filed for bankruptcy on December 8, 2008 and auctioned off its stations on April 16,
2009.160 Exactly two years after the bankruptcy was filed, trustee M. Randy Rice filed a complaint
against Luken claiming that the transfer of RTN was fraudulent because the $18.5 million sale price
represented just 16% of RTN’s $115 million valuation in November 2007. In other words, Rice
accused Luken of exploiting his position at Equity to loot the firm of one of its most prized assets.
On June 21, 2013, the jury returned a $47.4 million verdict against Luken Communications and the
company filed for bankruptcy two days later on June 23, 2013.161 It was the largest fraudulent
transfer jury verdict in Arkansas history, although Luken Communications ended up paying just $2
million to settle the claim.162
At the time of the bankruptcy, Luken Communications owned five networks of programming
broadcasting through 320 over-the-air stations.163 Today its networks include RTN, Tuff TV,
Heartland, Jewelry Television, PB&J, Rev’n, and Frost Great Outdoors. Luken Communications
also owns at least 80 low-power television stations throughout the country, more than 70 of which
he bought from the Minority Media and Telecommunications Council (MMTC) in 2011 for
$390,000.164 The stations had been donated to MMTC by Trinity Broadcasting, a California-based
Christian broadcasting network. Luken Communications owns its stations through sister company
Digital Networks LLC.165
Other Luken Companies
Luken owns his commercial real estate through Luken Holdings Inc. The company’s portfolio
includes both developed and undeveloped properties, many of which are office buildings and golf
courses. Luken Holdings also manages buildings owned by others, including the the Volunteer
Building in downtown Chattanooga, which belongs to Corker.166

“Answer of Luken Communications, LLC and Henry G. Luken,” M Randy Rice as Chapter 7 Trustee v. Luken
Communications, LLC and Henry G. Luken (in re: Equity Media Holdings Corporation, et al., Debtors)
159 “Answer of Luken Communications, LLC and Henry G. Luken,” M Randy Rice as Chapter 7 Trustee v. Luken
Communications, LLC and Henry G. Luken (in re: Equity Media Holdings Corporation, et al., Debtors)
160 http://www.broadcastingcable.com/news/programming/equity-media-sets-auction-stations/34518?rssid=20065
161 http://www.arkansasbusiness.com/article/93212/equity-medias-bankrutpcy-trustee-scores-474-million-verdictagainst-former-ceo-luken
162 http://www.chattanoogan.com/2014/9/18/284603/Attorney-Says-Luken-Communications.aspx
163 http://www.timesfreepress.com/news/business/aroundregion/story/2013/jun/27/luken-to-fight-bankruptcyverditc/111810/
164 http://www.timesfreepress.com/news/business/aroundregion/story/2016/feb/07/we-now-interrupt-your-regularprogramming-fcc/348548/
http://www.publicintegrity.org/2013/06/06/12769/civil-rights-groups-fcc-positions-reflect-industry-funding-critics-say
165 http://mmtconline.org/lp-pdf/Trinity%20Donation%20%20MMTC%20Closing%20Press%20Release%20102011%20-%20FINAL.pdf
https://enterpriseefiling.fcc.gov/dataentry/public/tv/draftCopy.html?displayType=html&appKey=17f540fe8e29471bb
452cf6212b6c0ea&goBack=N
166 https://www.linkedin.com/company/luken-holdings-inc
158

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Luken has leased space in his buildings to Tennessee agencies through the state’s negotiating agent
Jones Lang LaSalle. The latter firm is the developer of Mobile, Alabama’s McGowin Park shopping
center, where Corker invested up to $5 million in 2014, and it manages several properties on behalf
of CBL Properties, where Corker has invested tens of millions of dollars in recent years.167
Tennessee governor Bill Haslam, a Corker ally and the brother of Corker’s college roommate Jimmy
Haslam, has invested an undisclosed amount in Jones Lang LaSalle.168 Haslam’s administration also
hired the firm to negotiate its agencies’ leasing deals.
In addition to Luken’s broadcast and real estate holdings, he owns two construction companies:
Luken Contracting and GreenForm Construction & Solar, a company that does general contracting,
roofing, and solar projects.169 He also owns Christensen Shipyards, a yacht builder based in
Vancouver, WA, and he previously served as a managing agent of Henry IV LLC, an aircraft sales
company.170
Real Estate Deal with Senator Corker
One of the first and most substantial examples of Corker and Luken’s business relationship was
Luken’s 2006 purchase of 36 properties from Corker, encompassing the vast majority of Corker’s
real estate empire.
In so doing, Luken appears to have bailed the future senator out of a failing business; Corker’s rental
income had dropped from a range of $14 million to $57.5 million to a range of $3.3 million to $20.5
million from 2004 to 2005, and he had more than $120 million in liabilities at the time of the sale.
Corker’s activities in the Senate subsequently advanced Luken’s business interests in several different
ways.
The January 2006 transaction consisted of 36 office and retail buildings, including the Tallan, James,
and Krystal buildings in downtown Chattanooga, 12 commercial buildings near Eastgate Town
Center, the Osborne Shopping Center, and five commercial buildings in East Ridge, TN.171
The sale of the buildings netted Corker up to $55.5 million, and he made quick use of the money.
He made eight loans to his Senate campaign worth $4.165 million in July and October 2006,
concentrated in the weeks just before the August 3 primary and the November 7 general election.
This sum represented 23% of his total spending in the campaign, in which Corker eked out a 2.5

http://www.timesfreepress.com/news/politics/state/story/2015/dec/22/remaining-workers-chattanoogstate-officebuil/341506/
https://tn.gov/assets/entities/finance/osa/attachments/DecESC15.pdf
http://www.jllproperty.com/Assets/Images/Doc/McGowin%20Park.Mkt%20Flyer_3526787.pdf
http://www.law360.com/articles/469523/cbl-lands-176m-selling-malls-in-3-states
168 http://www.commercialappeal.com/news/editorial-haslams-lack-of-transparency-about-his-financial-interestscontinues-to-be-unnecessary-d-e-326692981.html
169 www.mygreenform.com
https://www.tva.gov/Energy/Renewable-Energy-Solutions/Green-Power-Providers/NABCEP-Installers-List
170 http://www.columbian.com/news/2015/jun/30/christensen-shipyards-henry-luken-vancouver/
https://efile.mpsc.state.mi.us/efile/docs/13786/0012.pdf
171 http://www.chattanoogan.com/2006/1/5/78144/Corker-Selling-Many-Business-Holdings.aspx
“Corker appreciates 1994 loss,” The Knoxville News-Sentinel, Tom Humphrey, July 2, 2006
167

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point victory over Harold Ford. The campaign largely hinged on television advertising, and Corker’s
pricey TV advertising were instrumental to Corker’s triumph.
In addition to the loans to his campaign, Corker quickly shifted a portion of the Luken proceeds
into five hedge funds: Pointer Management, TSW II, Argonaut Aggressive Global Partnership,
Priority Value Partners, and Sansar Capital Special Opportunity Fund. Corker’s Senate financial
disclosures indicate that he poured between $8.5 million and $39.5 million into the hedge funds that
year. Between $5 million and $25 million of that was invested in Pointer, which would go on to earn
Corker a total of between $3.9 million and $15.5 million over the course of the subsequent nine
years.
In short, without Luken’s generosity, Corker likely would never have been a US senator, nor would
he have been able to reinvent himself as a millionaire hedge fund invester.
After Luken took control of Corker’s struggling properties, he was initially unable to find a bank that
would refinance their subprime mortgages, which had originally been taken out by Corker. When in
June 2009 GE Capital called in the loans on properties now owned by Luken, he was only able to
secure two six-month extensions, until Wells Fargo agreed to refinance more than $28 million of the
debt in March 2010.172 According to Luken Holdings president and CEO Lynda Childress, the loan
was technically in default prior to the refinancing.173

Wells Fargo’s new lending agreement with Luken, which came at a time when other banks would
not extend new financing because of the post-crisis credit crunch, was a huge boon to Corker and
Luken alike. Thanks to the loan, Luken avoided insolvency. As the original borrower from GE
Capital, Corker likely maintained a contingent liability on the properties, meaning GE Capital’s
refusal to roll over the loans was a threat to his financial well-being as well.
Corker’s position on the Senate Banking Committee made him an ideal target for Wells Fargo’s
timely generosity. Corker has advocated for many pro-bank positions during his tenure on the
committee, including sponsoring a 2013 reform proposal that would transfer to Wells Fargo
hundreds of billions of dollars in market share currently held by Fannie Mae and Freddie Mac.
Corker’s Favors for Luken
Corker’s actions as both mayor and senator have benefitted Luken’s companies on several
occasions, a longstanding pattern that suggests Corker’s favors are a form of repayment to Luken
for taking the failing properties off of his hands.
Media Regulation
During his Senatorial career, Corker has often taken steps to defend the success of Luken’s telecom
holdings. Luken is betting that the two-tiered model of consumption, based on streaming content
like Netflix coupled with growing demand for broadcast television, will open the market for his
companies. While the logic of this conclusion appears sound, the ongoing probability of Luken’s bet

172
173

http://www.timesfreepress.com/news/businesstopstory/story/2010/mar/27/fresh-credit-flows-to-luken/11040/
http://www.timesfreepress.com/news/businesstopstory/story/2010/mar/27/fresh-credit-flows-to-luken/11040/

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is highly sensitive to changes in the telecom regulatory framework, and Corker has repeatedly backed
legislation and lobbied the FCC for rules that would benefit Luken’s companies.
Luken is an active member and funder of two telecom trade groups: The Future of TV Coalition,
which is an affiliate of the National Association of Broadcasters, and which promotes the evolution
of digital broadcasting and preservation of free and local television; and the LPTV Spectrum Rights
Coalition.174 Where he has weighed in on telecom issues, Corker’s positions have typically been in
lockstep with each group’s, particular on issues when Luken’s interests were in play.
The biggest FCC action threatening Luken’s television business is its reallocation of spectrum
currently held by broadcasters to wireless broadband companies through a reverse auction. The
auction, scheduled to take place on March 29, 2016, will be lucrative for eligible broadcasters who
choose to sell their spectrum, but it does not include low-power stations like the ones owned by
Luken.175
If low-power television (LPTV) had been included in the auction, it would have represented a major
coup for the industry and for Luken personally. Luken has complained in the media of the FCC’s
unfair treatment of LPTV in carrying out the spectrum auction.176
Instead of being allowed to sell their spectrum, LPTV stations will be subject to displacement and
relocation. The FCC wrote in a notice of proposed rulemaking that “as part of the incentive auction,
we will reorganize or ‘repack’ the broadcast television bands in order to free up a portion of the ultra
high frequency (UHF) band for new flexible uses…Accordingly, a significant number of LPTV and
TV translator stations may be displaced as a result of the auction or repacking process and required
to find a new channel from the smaller number of channels that will remain in the reorganized
spectrum or discontinue operations.”177
The LPTV Spectrum Rights Coalition believes that each LPTV station move would cost
broadcasters $150,000. It estimates that this would add up at least $570 million in costs across the
LPTV industry and possibly up to $1 billion in costs due to construction delays that result from
auction uncertainties.178
It is unclear if Corker pushed the FCC for LPTV’s inclusion. Searches of FCC databases recovered
no such evidence, but the agency’s recordkeeping is extremely limited. Email correspondence more
than six months old is exempted from FOIA requests, and no records of phone calls are kept. In
short, virtually any correspondence outside of a formal letter by Corker or his staff to lobby the
agency would not have been preserved.
However, Corker has sent at least one letter to the FCC regarding the auction, and his position
aligned with Luken’s financial interests. In a September 7, 2012 letter to then-FCC chairman Julius
Genachowski, Corker and eight of his colleagues in Tennessee’s congressional delegation asked the

http://www.nab.org/documents/newsroom/pressRelease.asp?id=2637
https://www.fcc.gov/document/fcc-establishes-incentive-auction-bidding-procedures
176 http://www.timesfreepress.com/news/business/aroundregion/story/2016/feb/07/we-now-interrupt-your-regularprogramming-fcc/348548/
177 https://apps.fcc.gov/edocs_public/attachmatch/FCC-14-151A1.pdf
178 http://www.tvtechnology.com/opinions/0004/auctiondisplaced-lptv-costs-could-reach-1-billion/273183
http://www.lptvcoalition.com/#!members/c1sk6
174
175

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agency to protect “the ability of the public to continue to receive over-the-air television signals from
those television stations that will continue to provide service to our constituents after the auction is
over...all Americans deserve to know whether the Commission’s repackaging plan will affect their
ability to continue receiving television signals from stations that do not participate in the auction.”179
In essence, Corker and his colleagues were seeking to ensure that Luken’s low-power TV stations
and his broadcast-dependent networks would have a role in the new environment.
Less then two years after Corker sold his sinking real estate properties to Luken, he was a cosponsor of the Media Ownership Act of 2007. The bill would have made it harder for the FCC to
tighten its regulations related to broadcast ownership, mandating, among other measures, a new sixmonth notice and comment period.180 In essence, the bill sought to shelter media incumbents, like
Luken and Equity Media. The firm addressed this issue in subsequent SEC filings, expressing
concern that new FCC media ownership rules could limit Equity’s ability to acquire additional
television stations in its existing markets.181
Another media law that Corker co-sponsored was the Broadcaster Freedom Act of 2007, which
sought to prohibit the FCC from ever readopting the Fairness Doctrine.182 (The Doctrine was in
place from 1949 to 1987.) Among other requirements that could have forced Luken’s channels to
radically alter their programming, the doctrine required stations to devote some of their content to
controversial issues of public importance and air the opposing views on those issues.183 In a press
release announcing Corker’s co-sponsorship of the bill, the senator said, “Broadcasters should have
every right to choose programming based upon their own business decisions and not what
bureaucrats in Washington think should be on the air.”184 The National Association of
Broadcasters was strongly in favor of the bill.185
Corker has also assisted Luken on the FCC’s “must carry” rules, which allow broadcast stations to
require cable operators to carry their signal if the operator is located in the same market as the
station. Small broadcast stations like the ones owned by Equity Media and Luken Communications
are heavily dependent on “must carry” provisions included the Cable Television Consumer
Protection and Competition Act of 1992.186 A la carte cable proposals that undermine “must carry”
by allowing customers to choose the stations they pay to receive represent a substantial threat to
broadcast stations that air on cable; without them, their number of viewers would likely plummet.
When former Federal Communications Commission chairman Kevin Martin announced his support
for a la carte channel availability, Corker, Senator Lamar Alexander (R-Tenn.) and Rep. Marsha

http://apps.fcc.gov/ecfs/comment/view?id=6017143592
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:SN02332:@@@L&summ2=m&
181 https://www.sec.gov/Archives/edgar/data/1327012/000114420408019320/v108877_10k.htm
182 https://www.congress.gov/bill/110th-congress/senate-bill/1748/cosponsors
183 https://www.washingtonpost.com/blogs/ezra-klein/post/everything-you-need-to-know-about-the-fairness-doctrinein-one-post/2011/08/23/gIQAN8CXZJ_blog.html
184 https://votesmart.org/public-statement/278026/corker-cosponsors-bill-to-protect-free-speech-free-marketprinciples-on-talk-radio#.VsYG6ZMrLSA
185 http://www.nab.org/documents/newsroom/pressRelease.asp?id=1713
186 https://www.sec.gov/Archives/edgar/data/1327012/000114420408019320/v108877_10k.htm
179
180

41

Bob Corker

May 25, 2016

Blackburn (R-Tenn.) wrote a letter on February 12, 2008 declaring that his proposal could have a
“devastating impact” on Tennessee’s broadcasting sector.187
Equity Media and Luken Communications did not appear in the letter, but their profitability was
clearly threatened by Martin’s position. As Equity has complained in its SEC filings, “New laws or
regulations that eliminate or limit the scope of these cable carriage rights could significantly reduce
our ability to obtain cable carriage, which would reduce our ability to distribute our programming
and consequently our ability to generate revenues from advertising.”188
In 1999 Tennessee passed a law that prevented local utilities like Chattanooga’s EPB from providing
television and Internet services outside a 600 square-mile area, preventing it from competing against
rivals such as Covista in the rest of the state. In July 2014, EPB filed a petition with the FCC to
preempt the state’s rules and allow EPB to expand its broadband reach. Corker, stuck between
supporting either his former colleagues in Chattanooga or EPB’s broadband competitors, did not
publically weigh in on the issue. However the Washington Post reported that Corker “believes it’s best
left to the states,” meaning he sided against FCC preemption and with competitors such as Covista,
which at this point was owned by Birch Communications.189
Volkswagen and Luken’s Real Estate
In addition to these attempts to influence legislation and regulation, Luken’s property holdings also
benefitted from one of Corker’s signature victories as a public official: the recruitment of
Volkswagen to Chattanooga. As mayor, Corker was instrumental in choosing the location of land
that the city acquired for future economic development, which was known as Enterprise South.190 In
2008, Corker played a key role in convincing the company to build a production facility on the
land.191 In addition to making public appearances in favor of the investment, Corker hosted
representatives of Volkswagen and local political leaders together at his home on at least three
separate occasions.
The end result of Corker’s lobbying for Volkswagen investment proved a boon for Luken’s real
estate holdings. In March 2001, Luken acquired a 117,525-square-foot Kmart shopping complex as
well as an adjacent 28,714 square foot complex that would serve as the home for Covista
Communications. County records indicate that he did not pay former owner Spato Corp. N.V.
anything for the property.192 The buildings are situated in the same portion of Chattanooga metro
area as the Volkswagen plant, separated by four miles and approximately 10 minutes driving.193

https://web.archive.org/web/20080220000457/http://www.multichannel.com/article/CA6532681.html
https://www.sec.gov/Archives/edgar/data/1327012/000114420408019320/v108877_10k.htm
189 https://www.washingtonpost.com/blogs/govbeat/wp/2014/08/12/city-state-and-federal-governments-are-fightingover-chattanoogas-effort-to-bring-broadband-to-rural-consumers/
190 http://www.chattanoogachamber.com/news-media/news/unsorted-news/commitees/survey/enterprise-southgains-1-787-acres
191 http://www.knoxnews.com/business/choo-choo-hit-right-note-with-volkswagen-officials-ep-411246834359823511.html
192 http://assessor.hamiltontn.gov/Summary.aspx?AccountNumber=381866
http://assessor.hamiltontn.gov/Summary.aspx?AccountNumber=54657
187
188

193

https://www.google.com/maps/dir/4803+Highway+58,+Chattanooga,+TN/Volkswagen+Group+of+America,+800
1+Volkswagen+Dr,+Chattanooga,+TN+37416,+United+States/@35.08657,-

42

Bob Corker

May 25, 2016

In a 2012 interview, Luken pointed to the proximity of the Volkswagen plant as the reason for his
two properties’ spike in value.194 According to a public records database, the assessed value of the
Kmart property increased by more than $123,000 from 2008 to 2009, jumping from $2.47 million to
$2.59 million. The Covista property increased by more than $106,000 from 2008 to 2009, jumping
from $1.66 million to $1.77 million. Luken sold the Kmart complex in 2014 for $2 million and still
owns the former Covista building, which he now rents out to other tenants.
In 2001 Luken also purchased a series of tracts of undeveloped land in Mountain Lakes Estate, a
subdivision in nearby Ooltewah that appears to have experience a mini-boom thanks to the
Volkswagen investment. The Chattanooga suburb is also just minutes away from the Volkswagen
plant, and Ooltewah’s proximity is a major selling point for local real estate agents.195 The
undeveloped properties in the area, which cost Luken $75,000 apiece, today house several sprawling
homes, some of which are worth nearly $3 million.196 It is unclear whether any of Luken’s Ooltewah
properties have turned into houses.
It is also possible that as a senator, Corker steered federal funding to one of Luken’s business
interests. When Christensen Shipyards faced financial difficulties during the 2009 recession, its newly
created sister company Renewable Energy Composite Solutions received $1 million in stimulus
funds to retool some of its manufacturing capabilities to produce wind turbines.197

85.2055628,13z/data=!4m14!4m13!1m5!1m1!1s0x886062273cdabd7f:0xa9ea4844dc060d7e!2m2!1d85.187505!2d35.090963!1m5!1m1!1s0x8860631e19867409:0x3f8d80f2d071e77c!2m2!1d-85.1352019!2d35.0790798!5i1
194 http://www.timesfreepress.com/news/business/aroundregion/story/2012/jul/10/chattanooga-kmart-closingharrison-site/82108/
195 https://www.catylist.com/listing/21126357/6023-OOLTEWAH-GEORGETOWN-RD-Ooltewah-TN-37363
https://www.catylist.com/listing/29836549/8811-Production-Ln-Ooltewah-TN-37363
196 http://www.zillow.com/homedetails/8569-Balata-Dr-Ooltewah-TN-37363/41412083_zpid/
197 http://www.slideshare.net/JoeFFoggia/invictus-christensen-saga
http://www.pdxmonthly.com/articles/2010/1/19/environment-windpower-0210

43

CAMPA

GN

FOR

ACCOUNTABIL TV
November 10,2015
Andrew J. Ceresney
Director of Enforcement
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Honorable Johnny Isakson, Chair
Honorable Barbara Boxer, Vice Chair
Senate Select Committee on Ethics
Hart Building, Room 220
Washington DC 20510

VIA FAX
Re: Request for Investigation of Senator Robert P. Corker, Jr.
Dear Mr. Ceresney, Chairman Isakson, and Vice Chairwoman Boxer:
Campaign for Accountability respectfully requests that the Securities and Exchange
Commission and the Senate Select Committee on Ethics investigate whether Senator Robert P.
Corker, Jr. (R-TN) violated federal law and Senate rules by trading stock based on material, nonpublic information he received from an insider with either CBL & Associates Properties
("CBL") and/or UBS, and by knowingly omitting data from his personal financial disclosure
forms.

Background
CBL is reportedly the fourth-largest shopping mall real estate investment trust ("REIT")
in the United States and began trading publicly in I 993.' Since joining the Senate, Sen. Corker' s
personal financial disclosure forms ("PFDs") show he and his family have carried out 70 trades
ofCBL stock between 2007 and 2015 - far more than of any other stock in his portfolio.2 Many
of these trades appear to have been improbably well-timed, preceding by a few days or weeks
large fluctuations in the company's share price.
In recent months, Sen. Corker has filed at least two amendments to his PFDs. These
amendments reveal seven trades by Sen. Corker and his family in CBL - worth a total of up to
, CBL Corporate History, available at http://www.cblproperties.com/cbl.nsf/corporate_ history.html.
See Sen. Robert P. Corker, Personal Financial Disclosure Forms, 2006-2014, available at
https: i w\\'\\.opensecrets.org/pfdsicancllook.php?txtName- Corker; and Periodic Transaction Reports for 3/20/2015,
8/31 /2015, and 10/ 19/2015 , available at https: efdsearch.senate.!!.oy1searchi.

2

1201 Connecticut Avenue, N.W.

Suite 300

Washington, D.C. 20036

www.campaignforaccountabi I ity. 0 rg

(202) 780-5750

$34 million - that he had previously failed to disclose. 3 One of these newly disclosed
purchases preceded a months-long increase in CBL's share price that appears to have earned
Sen. Corker a minimum of$1.47 million. 4
Amid a major public controversy over alleged congressional insider trading in late 2011,
the Wall Street Journal reported on December 30,2011 that Sen. Corker reaped more than $1
million on his CBL trades during 20ID. 5 The Journal did not have the whole story, however, as
Sen. Corker provided an incomplete account to the paper of his trading activity - neglecting to
mention that he had also been trading CBL stock heavily (and profitably) in 2011. Sen. Corker
also took full credit for his many trades, neglecting to disclose that the trades were actually
placed by his broker, UBS, whose analysts follow CBL and rate its stock.
A few months after the Journal initially called attention to Sen. Corker's unusual trades,
he was required to disclose his 2011 investments in his annual PFD.6 According to a letter not
filed until 2013 by Sen. Corker's accountant, UBS allegedly withheld information about the
senator's 2011 trading activity- with the result that Sen. Corker omitted material information
regarding his CBL trades and holdings on his 2011 PFD.7 Sen. Corker's inaccurate 2011 PFD
was released in August 2012, as he was in the midst of campaigning for a new Senate term in the
November 2012 elections.
On November 3, 2015, the Journal published another story, this time noting that Sen.
Corker had failed to reveal a dozen stock purchases in CBL, "including several that resulted in
his most profitable investments."s The article noted that Sen. Corker had previously failed to
disclose a March 9, 2009 purchase ofCBL at $2.07/share for between $200,000 and $500,000
made through accounts in the names of his dependent daughters. 9 CBL shares were not sold
from that account until May 12, 20ID, when the stock had risen in value to about $16/share,
netting a gain of at least $1 million, and perhaps has much as $3.8 million.1O

The Trades
Sen. Corker first disclosed owning CBL on his 2007 PFD, reporting assets valued at more
than $1 million.11 The senator and his family made eight trades in 2008, six of which were not

Brody Mullins and Tom McGinty, Sen. Bob Corker Profits on Quick Stock Trades, Wall Street Journal, November
3,2015 (attached as Exhibit A).
4 1d.
S Brody Mullins, Jason Zweig and Tom McGinty, Lawmakers Lose in Markets - Analysis Shows That Some
Members of Congress Should Elect Not to Trade, Wall Street Journal, December 30,2011 (attached as Exhibit B).
6 See Sen. Robert P. Corker, Jr., United States Senate Financial Disclosure Report for 20 II at 2, filed August 10,
2012, available at hup: '/pfcls.<lRensccrets.orglN0002744I ')0 ll.pdf ("hereinafter 20 11 PFD").
7 Sen. Robert P. Corker, Amendment to Personal Financial Disclosure Form for 2011, filed August 27,2013,
available at hltps: ' 'efdscarch.scnatc.gov /scarch /view /paper/45,)9ABAO-62AD-401 B-A36D-F08F08D9FAD II
(hereinafter "20 II Amendment").
S Mullins and McGinty, Wall Street Journal, Nov. 3, 2015.
9 1d.
101d.
II See Sen. Robert P. Corker, Personal Financial Disclosure Form for 2007, at 36, filed August 8, 2008, available at
IlIlp::/p!jl.\'. open.l'eCrefs. org/N0002 7-1-11 20()7.pd(
3

2

disclosed until Sen. Corker filed amendment on November 2,2015, more than seven years
later. 12
In 2010, the senator actively traded the REIT's stock, reporting 26 transactions that
year. J3 Fourteen of the trades were in excess of$1 million, and two of them were valued at
between $5 million and $25 million.14
In many of his CBL trades, Sen. Corker purchased during low periods and sold during
high moments, typically beating the subsequent market movement. For instance, on May 7,
2010, Sen. Corker executed two purchases of CBL stock on behalf of his dependent children
collectively worth between $1 million and $2 million.15 That day, the stock closed at
$13.70/share, its lowest price in months, but it would subsequently surge. On May 12, it had
already jumped to $16.06, a 17% increase in just three trading days.16
Also on May 12, Sen. Corker's financial disclosures indicate that he executed two sales
of CBL stock on behalf of his dependent children worth more than $1 million each. J7 The
Corkers secured substantial profits in a very short time period-between $172,000 and $344,000
over the course of just five days. They appear to have sold at the perfect time as the stock
subsequently tumbled, bottoming out at $12.64/share in early June. 18
In several of his trades in 2010 and 2011, Sen. Corker's transactions foreshadowed
ratings announcements by his broker, UBS. On at least three occasions, Sen. Corker registered
CBL transactions worth millions of dollars days before a UBS ratings adjustment of CBL stock
sent the share price in a favorable direction. For instance, on June 29, 2010 and again July 7,
2010, Sen. Corker purchased CBL stock worth between $1 million and $5 million. 19 On July 8,
2010, UBS, the senator's broker, announced an upgrade ofCBL stock from "sell" to "neutral."20
The stock's value increased by approximately 19%, moving from $11.83 on July 7 to $14.00 on
July 26 and $13.96 on July 27.21 Sen. Corker therefore reaped a profit of between $309,000 and
$1.545 million in less than a month.

12 Sen. Robert P. Corker, Amendment to Personal Financial Disclosure Form for 2008, filed November 2,2015,
available at hnps:!/www. le~is!onn.col11/l11el11berdisclosllre.f814/Sen Bob Corker.htm!.
13 See Sen. Robert P. Corker, Personal Financial Disclosure Form for 20 I 0, filed August 4,20 II at IV-I-IV-3,
available at hup://pfcls.o[lel1<;ccl'crs.ol'u..'N0002744I 'Q.JJLpdf (hereinafter "20 I 0 PFD").
14 1d.
15 2010 PFD.
16 CBL & Associates Properties Inc., Historical Prices, available at
hllv://{inullce. valloo.col1l/Ci/hp?s=C13L&a=03&h= 1&('=::0 I O&d=04&e= 12&f=:!O I 0& <.;=d.
17 20 I 0 PFD. Disclosure requirements for sales by family members have less restrictive ranges, so there is no
indication of an outer limit on the sale.
18 CBL & Associates Properties Inc., Historical Prices, ami/oNe at
III1V: }/inallce. rahuo.com.'((h{,?s=C13L&a=03& h= I &('=::0 I O&d=05&e= 30& [= 20 I 0& g=d.
19 2010 PFD.
20 UBS Upgrades Several REIT Stocks, Streetlnside/:com, July 8, 2010 (attached as Exhibit C).
21 CBL & Associates Properties Inc., Historical Prices, available at
http: '/tinance. vahoo.comig/hp?s=CBL&a=05&b= 1&c='O I0&d=07&e= I &fc- 7 0 1O&!cd.

3

On July 26 and July 27, 2010, Sen. Corker sold his CBL stock in two trades collectively
worth between $2 million and $10 million. 22 Shortly thereafter, on August 5, 20 I 0, UBS
dropped its rating ofCBL from "neutral" to "sell,'>23 causing a tumble in the stock's value: the
day of the announcement, the stock slipped from $13.92 to $13.40. A week later, it registered a
value of$12.55, and would subsequently fall even further. 24
Sen. Corker continued actively trading CBL stock in 2011, registering 14 total trades. 25
As in 2010, on at least one occasion his trades closely preceded favorable ratings adjustments by
UBS, resulting in a windfall, and on multiple occasions, his trades preceded announcements of
CBL of new investments and acquisitions, which precipitated a boost in price.
Sen. Corker's first CBL trade of the year occurred on January 24, 2011, when he
purchased between $500,000 and $1 million worth of stock at approximately $16.90/share?6
Notably, this purchase preceded a CBL conference call that announced better than anticipated
results and disclosed new investments in four CBL properties, which preceded a weeks-long
surge in the price ofCBL. 27
On April 6, 2011, Sen. Corker bought another $500,000-$1 million worth of CBL stock,28
this time at about $17.511share. 29 CBL's stock price hit a three-month high on April 27, 2011 of
$18.70. 30 The same day, the senator sold a block of shares worth between $1 million and $5
million. 31 His investment on April 6 appears to have earned him between approximately $34,000
and $68,000 during that period.
On June 14,2011, UBS announced it was upgrading its rating ofCBL from "sell" to
"neutral," the only such ratings adjustment for that year uncovered to date. 32 As he did on
multiple occasions in 2010, Sen. Corker made trades closely preceding the announcement,
allowing him to profit from the subsequent movement in the market. On June 10, Sen. Corker
purchased between $1 million and $5 million worth of CBL stock at about $16.73/share, and

222010 PFD.
23 UBS Downgrades CBL & Associates to Sell, StreetInsidel:col11, August 5, 2010, available at
http:l·www.streetinsider.col1l/Downgrades. U BS+Downgrades+CB L+%26+Associates+% ') 8CBL'!.o29+to+Sell, 5867
531.htl11l.
24 CBL & Associates Properties Inc., Historical Prices, available at
hltp :!!tinance.vahoo.col11/q/hp'.'s=CBL&a=05&b= I&c=20 I O&d-07&e=27&f=)0 I O&g=d.
25 20 II PFD at IV(\).
26 !d.; CBL & Associates Properties Inc., Historical Prices, available at
http: //fi nance.vahoo.com .'q l hp'.'~ - CBL&a - II &b= I &c=')O I O&U=OI &e= I & f'=2 0 II &g- d.
27 See CBL & Associates sees FY II FFO $2.10-$2.15 vs. consensus $2, Thejlyonthewalf. com, February 8, 20 II
(attached as Exhibit C); CBL & Associates Properties Inc., Historical Prices, available al
http://finance.vahoo.com!q/hp?s=CBL&a=OO&b= 15&c=20 II &d=02&e=27&f=')O 11 &g=d.
28 2011 PFD.
29 CBL & Associates Properties Inc., Historical Prices, available at
http://finance .vahoo.com.'q/hp'.'s=CBL&a=O')&b= I 0&c=20 II &d=03&e- 1O&f=') 0 II &g=c1.
30

!d.

31 2011 PFD.
32 UBS Upgrades CBL & Associates to Neutral, Streetlnsider.col11, June 14,20 II, available at
http://www.streetinsider.comiUpgradesiUBS+Upgrades+CBL+%26+Associates+%')8CBLo'o29+to+NeutraIi657840
6.htl11l.

4

three days later, on June 13, the day before the UBS upgrade, he bought another $1 million to $S
million at around $16. 9l1share. 33
The temporary boost in CBL share prices allowed Sen. Corker to reap a short-term
windfall. On June 22, Sen. Corker sold between $1 million and $S million of CBL at about
$18.04/share, and he sold another $1 million to $S million on June 29 at approximately
$17. 98/share. 34 As a result of the trades, Sen. Corker earned profits of between approximately
$142,000 and $709,000 injust a few weeks.
In the spring of2012, Sen. Corker filed his PFD for 2011 indicating his profits from
trading CBL were between $100,000 and $1 million, and that he no longer held any CBL stock. 35
Contrary to the information he provided on his PFD, however, Sen. Corker, in fact, had retained
between $1 million and $S million worth ofCBL stock, as he finally disclosed in August 2013,
when he filed an amendment to his 2011 PFD. 36
In the August 2013 amendment, Sen. Corker's accountant claimed the large CBL holding
had not been declared earlier because it had not come to light until it appeared in a 2012 UBS
brokerage statement. 37 The letter stated, "The gain/loss report for 2012 provided by UBS clearly
reflects the acquisition date for CBL stock sold in 2012 as November of2011.,,38
Still, Sen. Corker did not disclose the specifics of the trade that led him to retain his CBL
stake until October IS, 201S, nearly four years after the evene 9 According to the 201S
amendment, Sen. Corker acquired between $1 million and $S million in CBL stock on November
29, 201l. 40 That day, CBL closed at $13 .39,just two days removed from the stock's six-week
low.41 From there, however, CBL embarked on a months-long increase.
By the time Sen. Corker sold liquidated CBL holdings on May 2, 2012, the price had
reached $19.02/share, an increase of 42% in the share price42 that appears to have earned him a
minimum of of $l.4 7 million in profits.43 A month later, the stock had lost 20% of its value,44

20 II PFD; CSL & Associates Properties Inc., Historical Prices, available at
ilttp:/!finance.vahoo.colll/g/hp?s=CSL&a=03&b= I&c=20 II &d=06&e= 1&1'=')0 11 &g=d.
34 20 II PFD; CSL & Associates Properties Inc., Historical Prices, available at
http::.rfinance.vahoo.colll/g/hp'.'s=CBL&a=03&b= I &c=20 II &d=06&e= 1& 1'=')011 &g=d.
35
2011 PFD.
36 20 II Amendment.
37 1d.
381d.
39 Sen. Robert P. Corker, Amendment to Personal Financial Disclosure Form for 20 II, filed October 16,2015,
available at Imps: '/efdsearch.scnate.gov/search/print/paperiI8D0705E-C86')-49'18-13888-103 D9A3 130503 I
(hereinafter "20 II Amendment 2").
40 20 II Amendment 2.
41 CSL & Associates Properties Inc., Historical Prices, available at
http: '!financc. vahoo.com.'q/hp'?s=CSL&a= I O&b= 1&c"'~20 II &d= II &e=1 &f=20 II &g=d.
42 CSL & Associates Properties Inc., Historical Prices, available at
http: . financc. \-ahoo.comiq/hp?s=CSL&a=03&b= I &c=20 II &d=04&c= I2&f=') 0 II &g=d.
43 This calculation is based on the fact that Sen. Corker's CSL holdings leapt from the $1-$5 million range to the $5$25 million range from November 20 II to May 2012. Presumably this increase is attributable to the 42% jump in
the stock's value. To have at least $5 million worth ofCSL stock following the 42% increase, Sen. Corker would
33

5

indicating that he both bought CBL in November 2011 and sold in May 2012 at almost the ideal
point in the stock's trajectory. According to his 2012 PFD, that single trade was worth between
45
$5 million and $25 million.
In essence, Sen. Corker bought low, sold high, and failed to disclose his profit in the
prescribed time period.

Sen. Corker's Relationships with CBL and UBS
Sen. Corker has longstanding ties to both CBL and UBS, including a uniquely tight
relationship with the REIT. As already noted, Sen. Corker's stock portfolio consists of more
CBL stock trades than any other security, despite the fact that CBL stock is thinly traded and
many of his other stocks are well-known Fortune 500 firms.46 Since 2006, the senator and his
family have made approximately 70 trades of CBL, 19 of Apple, 15 of AIG (which he sold
completely in 2007), and 14 of Wells Fargo.47
Sen. Corker's ties to CBL date back to the origins of his professional life: he worked for a
company whose primary business was subcontracting for CBL after college and then went out on
his own, starting a construction company, and later his own very successful real estate
development business, the Corker Development Company.48 When Sen. Corker was elected
mayor of Chattanooga, CBL and Corker were the two largest developers in the county.49 CBL
executives were the first and most generous donors when Sen. Corker filed to run for Senate in
2006, contributing $24,000,50 constituting 56% of his first day's take. CBL executives,
employees and their spouses have been among the senator's top campaign donors, contributing
$88,706 to his campaign committee and PAC. 51
CBL executives also hold leadership positions in trade groups that have supported Sen.
Corker's political career. Members of the Lebovitz family, which owns CBL, have for years
served on the board of governors of the National Association for Real Estate Investment Trusts
(NAREIT).52 Stephen Lebovitz, the president and CEO ofCBL, is the current chair of the

have to have held approximately $3.53 million worth of stock before the increase, meaning his profit would have
been a minimum of$1.47 million.
44 CBL & Associates Properties Inc., Historical Prices, available at
htlp:.If/inGllc£!. 1'01/1)0. cO/nlqlhp?s=CI3L&a=03&h= 1&('=20 I ,}&d=05&e=30&(=,}O 12&g=d.
45 Sen. Robert P. Corker, United States Senate Financial Disclosure Report for 2012 at 2, filed August 12,2013,
available at hup:/lpias.opensecrels.orglNOOO?744I 'JO 12.pdf (hereinafter "2012 PFD").
46 Mullins, Zweig and McGinty, Wall Street JOllrnal, Dec. 30, 20 II.
47 See Sen. Robert P. Corker, Personal Financial Disclosure Forms, 2006-2014.
48 Mullins, Zweig and McGinty, Wall Street JOllrnal, Dec. 30, 2011.
49 Dave Flessner, Chattanooga, Tenn. Mayor Proposes Property Tax Increase, Knight-Ridder Tribllne Blisiness News,
August 22, 20 II (attached as Exhibit D).
50 Bob Corker for Senate, FEC Form 3, 2004 Year-End Report, Amended, July 22, 2005, available
at http://docgllery.fec.gov/pdf/ 198125020341 198/25020341 I98.pdf.
51 Bob Corker For Senate 2018, Inc., FEC Form 3, 2006-2012 Reports, available at http://docgllery.fec.gov/cgibin/fecimg/?C00430462; Bob Corker For Senate, FEC Form 3, 2004-2006 Reports, available at
hup:lldocguery.fec.gov/cgi-bin/fecimg/?C00407650.
52 See Mentions to the Lebovitz family in the Nareit Board of Governors, available at https: "\Hvw.reit.com/nareityou/about-nareit/advison,' -board-governors.

6

International Council of Shopping Centers (ICSC).53 These two groups were part of a nine-PAC
consortium that held a fundraiser for Sen. Corker in Washington in 2011, and have donated
$15,000 directly to his campaign committee since his arrival in the Senate. 54 In the same period,
CBL executives have contributed more than $50,000 each to NAREIT and the ICSC, indirectly
funding Sen. Corker. 55
Sen. Corker is also well-connected to UBS. He has had accounts with the bank at least
since he first began filing PFDs and the bank is a tenant in a building he once owned in
downtown Chattanooga, Tennessee. 56 UBS executive Douglas A. Brown, senior vice president
for wealth management in the Chattanooga office, was an early contributor to the senator's 2006
campaign 57 and UBS has donated $75,300 to Sen. Corker's campaign committee over the course
of his Senate career, making it his eleventh largest contributor. 58 UBS contributed an additional
$30,000 to the senator's PAC between 2009 and 2015. 59

Sen. Corker's Explanation
When recently confronted by the Wall Street Journal over the inaccuracies in his filings,
Sen. Corker explained, "in a few cases, only the sale and gain or loss of the transaction was
reported. As a result of this inquiry, and after completing a full review, we are correcting this
oversight.,,60 He has blamed all the inaccuracies and errors on his accounting firm, apparently
contradicting his accountant's 2013 explanation that the failure to disclose was the result of
information withheld by Sen. Corker's broker, UBS.
Whatever the case, Sen. Corker was on notice previously that there were problems in his
filings but failed to correct them. His original financial disclosure for 2011 indicated he held no
CBL stock, but it was not until two years later that he filed an amendment, revealing that he
owned CBL stock valued at between $1 and $5 million. Even then, however, he did not disclose
the date of the purchase or amount of the transaction. Rather, only after questioned by the
Journal did the senator file another amendment, this time showing that he purchased the stock on
53 Stephen D. Lebovitz, President & CEO, CBL & Associates Properties, Inc. Elected ICSC Chairman, May 19,
2015, available at hu)): ·/www.icsc.org press. stephen-d.-Iebovitz-president-ceo-cbl-associates-properties-inc.elected-ic.
54 Real Estate Dinner for Bob Corker, July 19,20 II, available at politicalpartytime.org/party/27067/.
International Council of Shopping Centers, Contributions to Federal Candidates, available at
https:.','www.opensecrets.org/pacs/pacgot.php?cYcle=2006&cmte=COO" 17638.
National Association of Real Estate Investment Trusts, Contributions to Federal Candidates, available at
l!.!!ns:!!www.opensecrcts.org/pacs/pacgol.php?cYclc=20 16&cmte=C00303339.
55 National Association of Real Estate Trusts, Inc. Political Action Committee, FEC Form 3X Reports, 2004-2015,
available at
http:.'iww\\l.fec.gov/fecviewer/CandidateColl1mitteeDetail.do?candidateCommittceld=C00303339&tablnde,.,=3
International Council of Shopping Centers Inc. Political Action Committee, FEC Form 3X Reports, 2004-2015,
available at
http: '1\\1\\'\\1. fee .froV 'fecviewer/CandidateColl1ll1 ittecDetail.do?cand idateCommiLtee Id=COO" I 7638&tablndcx=J .
56 IHip: chattanoogan.com!2005!71 IS/696 I6ICorker-Group-Renovaiing-Tallan-Buildings.aspx.
57 Bob Corker for Senate, FEC Form 3 Reports, 2005-2006, available at Senate Letter Final.docx.
58 htip: www.opensecrets.org,'pol iticians/contrib.php?cycle=Carecr&cid=N0002744I &tvpe= I.
59 See Rock City PAC, FEC Form 3X, 2007-2015 Reports, available at http:/ docquel)'.fec.gov 'cgibin/fecimgj?C004364I O.
60 Mullins and McGinty, Wall Street JOllrnal, Nov. 3, 2015.

7

November 29,2011. 61 It also happens that the stock rose 6.7% the very next day, continuing on
an upward trajectory for the next few months. 62 Sen. Corker then sold his entire CBL stake for
between $5 and $25 million, netting an apparent profit of between $1.47 million and $2.1
million. 63
In sum, the undisclosed transaction was incredibly lucrative, likely would have been
questioned during the 20 I 2 Senate campaign had Sen. Corker revealed it as required, and the
senator's explanation for his inaccurate disclosures appears to evolve with each newly
discovered fact.
Legal Violations

Insider Trading
Under the classic theory of insider trading, Section 1O(b) of the Securities Exchange Act
of 1934 prohibits a corporate insider from trading shares of that corporation based on material
non-public information in violation of the duty of trust and confidence insiders owe to
shareholders. Chiarella v. Us., 445 U.S. 222, 228 (1980); SEC v. Obus, 693 F.3d 276, 284 (2d
Cir. 2012).
A tipper who violates his fiduciary duty by deliberately or recklessly tipping information
he knows to be material and non-public, and personally benefits from the tip may be held liable
for insider trading. Dirks v. SEC, 463 U.S. 646, 660-62 (1983); Obus at 286.
A tippee who knows that tipped information is material and non-public and has some
level of knowledge that by trading on the information he is a participant in the tipper's breach of
fiduciary duty also violates the law. Dirks at 660; Obus at 287. Tippee liability is established if
a tippee knew or had reason to know that confidential information was obtained and transmitted
improperly, and the tippee intentionally or recklessly traded while in possession of that
information. Obus at 288.
Recently, the Second Circuit Court of Appeals reconsidered the elements of tippee
liability. To sustain an insider trading conviction against a tippee, the government must prove:
(1) the corporate insider was entrusted with a fiduciary duty; (2) the corporate insider
breached his fiduciary duty by (a) disclosing confidential information to a tippee (b) in
exchange for a personal benefit; (3) the tippee knew of the tipper's breach, that is, he
knew the information was confidential and divulged for personal benefit; and (4) the
tippee still used that information to trade in a security or tip another individual for
personal benefit.

us. v. Newman, 773 F.3d 438, 450 (2d Cir. 2014) (citing Dirks v. SEC, 463 U.S. 646, 659-64
(1983) and Us. v. Jiau, 734. F.3d 147,152-53 (2d Cir. 2013)).
61/d.
62 Id.; CBL & Associates Properties Inc., Historical Prices, available a{
Ilflp:!I/iIl(IJ/cf!.rahoo.com/q/ hp?.I'=CBL&a= I O&b= 1&<:<:0 II &d= 11 &e= 15&(=:;0 II &g=d

631d.

8

The court concluded that a tippee must know of the personal benefit received by the
tipper in exchange for the disclosure, ld. at 449, and that the personal benefit must be "of some
consequence." ld. at 452. In other decisions the Second Circuit has explained that "personal
benefit" is broadly defined, including not only pecuniary gain, but also '''reputational benefit' or
the benefit one would obtain from simply 'mak[ing] a gift of confidential information to a
trading relative or friend.'" Obus at 285; Us. v. Jiau, 734 F.3d 147, 153 (2d Cir. 2013). Post
Newman, however, it appears that in exchange for the confidential information, the benefit to the
tipper must be "at least a potential gain of a pecuniary or similarly valuable nature." Newman,
773 F.3d at 452.
Based on his trading pattern, it appears that on several occasions Sen. Corker likely
received material, non-public information from either a UBS and/or CBL insider, who would
have breached a fiduciary duty by divulging this information, and the senator then used that
information to place timely trades on CBL securities. While the exact nature of the personal
benefit the tipper received is unknown, the gains to be reaped from providing tips worth millions
of dollars to a sitting United States senator cannot be overstated. The "friendship" or
indebtedness of a member of the Senate can result not only in reputational gain, but in substantial
pecuniary gain as well. Further, Sen. Corker is a member of the Senate Committee on Banking,
Housing & Urban Affairs, which has jurisdiction over issues of relevance and financial value to
both UBS and CBL. Sen. Corker is in a position to offer insight on potential committee
legislative and oversight action and to advocate in favor ofUBS and CBL interests.
Significantly, as a publicly traded REIT sponsor with access to large amounts of capital,
CBL is expected to be among the primary beneficiaries of one of Sen. Corker's legislative
priorities, a housing policy bill that could lead to the demise of government-backed mortgage
insurers Fannie Mae and Freddie Mac. According to Mult([amily Executive,
Unlike smaller entrepreneurial players, the REITs have many financing avenues available
to them by virtue of their size and public-company status. And should the GSEs go
away, many small owners might be forced to sell- and the large owners would be there,
capital in hand, ready to buy.64
Similarly, UBS is also a potential beneficiary of Sen. Corker's housing policy as big
banks will be in a position to finance more mortgages if Fannie Mae and Freddie Mac are
eliminated. Notably, in 2010, UBS began pushing into the U.S. mortgage business at around the
same time of some of Sen. Corker's most suspicious trades. 65

Ethics in Government and False Statements Acts
The Ethics in Government Act of 1978 ("EIGA") requires all members of the Senate to
file a personal financial disclosure report with the Secretary of the Senate. 66 Senators must
Jerry Ascierto, REITs Stand to Gain from the GSE's Demise, Multifamily £'reeutive, August 10,20 II, available at
http: \\ W\UllU IIi fam i",executive.com/business-Ii nanceireits-stand-to-gain-from-the-gses-dernise-I o.
65 Aaron Lucchetti, UBS Makes Push for U.S. Mortgages, Wall Street JOllrnal, August 2, 20 I 0, available at
http: ·fwww.wsj.colll ·articles ..SBIOOO 1424052748703787904575403354133923236.
66 5 U.S.c. app. 4, §§ 101(1), 103(h)(I)(A)(i)(I). EIGA further requires these reports to be disclosed to the public
immediately after they are submitted. Id. § 103(d).
64

9

disclose information regarding their financial and employment history, including sources of
income, gifts, and financial interests. 67 They also must disclose the receipt of gifts from any
source other than the U.S. government68 and report the identity of the source ofthe gift and the
value of gifts aggregating more than $375 in value from anyone source. 69 The name and address
of the source, as well as a description ofthe item and its value, all must be disclosed. 70
The EIGA authorizes the Attorney General to seek a penalty of up to $50,000 against an
individual who knowingly and willfully falsifies or fails to file or report any required
information. 71 Further, knowingly and willfully making any materially false, fictitious or
fraudulent statement on an EIGA filing is subject to criminal prosecution and up to five years
imprisonment under the False Statements Act. 72 In addition, Senate Rule 34 provides that Title I
ofEIGA is regarded as a rule of the Senate, subjecting violators to disciplinary action by the
Senate Ethics Committee. 73
Sen. Corker clearly failed to include information about numerous stock trades on his
PFDs and even his initial 2013 amendment to his 2011 PFD was inaccurate. Given the amounts
involved, it is clear that the omissions were material, leaving only the question of whether the
omissions were knowing and willful to remain.
The evidence indicates that they were. Sen. Corker has blamed his accounting firm for
the inaccuracies, claiming his accountants "mistakenly used realized gain/loss methodology
instead of the Senate financial disclosure guidelines."74 Yet in the amendment to his 2011 PFDnot filed until 2013, well after his 2012 election - Sen. Corker's accountant claimed the senator
had failed to reveal his enormous profit on the sale of CBL stock because it had only come to
light a year later when it appeared on a UBS brokerage statement,75 implying that Sen. Corker
was not personally familiar with the trades. This is contradicted by Sen. Corker's statement to
the Journal in 2011 in which he took personal credit for making the trades:

"I've watched the trading range on this hometown-based stock and have found that
during times of market volatility it trades within wide ranges, " Mr. Corker
said. "I've bought it heavily when it is at the low end of that range and then 1 hold it until
there is upward movement, when 1 sell. "76
e~pecially

67

{d. § 102.

68 Public Financial Disclosure Report for the United States Senate eFD Instructions, available at
http://www.eth ics.senate.gov /pub Iic/index.c fmlfi Ics/servc? Fi Ie id=98558990-0ta:2-4880-8!lo-6 77') 8c 7a7a69 at 19
(hereinafter "PFD Instructions").
69 {d. In 2011, filers were required to report gifts aggregating more than $335 and in 2012, they were required to
report those aggregating more than $350. See e.g., 2011 PFD and 2012 PFD.
70 PFD Instructions at 19.
71 {d. at 4 (citing 5 U.S.C. App. 4 § 104(a)).
72 {d.
73 PFD Instructions at 1.
74 Andy Sher, Sen. Bob Corker Blames Accountants for Disclosure 'Filing Errors', Chattanooga Times Free Press,
November 5, 2015, available at http://www.timesfi·ecpress.com/news.local/storv/2015/novi05 'corkcr-blamesaccountants-cIisclosure-lilim!-c 334056.
75 20 II Amendment.
76 Mullins, Zweig and McGinty, Wall Street Journal, Dec. 30, 20 II.

10

Further, the number of unreported trades, the fact that many of those trades were made
through accounts in the name of Sen. Corker's wife and daughters, and the particularly
auspicious timing of many of those trades, all combine to suggest Sen. Corker was attempting to
hide his CBL trading from public view.
In addition, Sen. Corker failed to disclose the likely gift of stock tips. The information he
appears to have received allowing him to reap substantial profits on stock trades clearly has
monetary value and therefore falls within the definition of "gift." Given that Sen. Corker
appears to have made more than $1 million based on this information-he declared capital gains
on his CBL trades of between $1 million to $5 million in both 2010 and 20 12-the value of the
information exceeds the aggregate value triggering disclosure. Sen. Corker did not, however,
disclose any stock tips on his 2011 or 2012 PFDs. As a result, he seems to have violated the
EIGA and - because his failure to disclose the inside information he received appears knowing
and willful - he also likely violated the False Statements Act.
G(ft Rule

Rule 35, paragraph 1(a)(1) of the Senate Code of Official Conduct states that "No
Member, officer or employee of the Senate shall knowingly accept a gift except as provided in
this rule.'l77 The Ethics Manual defines "gift" to mean "any gratuity, favor, discount,
entertainment, hospitality, loan, forebearance, or other item having monetary value. 78
Accordingly, the Senate Ethics Committee has stated that "Members and staff who use a "tip" of
material, nonpublic information to buy or sell securities in order to make a profit or avoid a loss
would have received an improper gift.,,79
It is also notable that officials with CBL and UBS have contributed to Sen. Corker's
campaigns. Federal Election Commission records show CBL's executives, directors and their
spouses have been among the senator' s most generous donors contributing $88,706 to his
campaign and political action committee, Rock City PAC. 80 UBS executives also have been
significant donors.81

The Senate Ethics Manual states:
The public has a right to expect Members, officers, and employees to exercise
impartial judgment in performing their duties. The receipt of gifts, entertainment,
or favors from certain persons or interests may interfere with this impartial

77 Senate Select Committee on Ethics, Senate Ethics Manual, p. 314 (l08 1h Congo 2003 ed.).
78

1d.

79 Senate Select Committee on Ethics, Restrictions on Insider Trading Under Securities Laws and Ethics Rules,
December 4,2012, available at hap:l/www.ethics.senate.!!.oviRublic iindex.cfmiJiles!serve.?File id=8c923399-2dcO4ef6-aOtP-gef564fc7038 (hereinafter "Senate Insider Trading Memo").
80 Bob Corker For Senate 2018, Inc., FEC Form 3, 2006-2012 Reports, available at http://docguery.fee.gov/cgibin/fecimgJ?C00430462; Bob Corker For Senate, FEC Form 3, 2004-2006 Reports, available at:
htlp:lldoeguery. fee .gov/cgi-bi n/fecimg/?C00407 650.
81 See http:! 'www.openseercls.on?:ipoliticiansieontrib.phpkvclc=Career&cid=N0002744I &t"pe-I; Rock City PAC,
FEC Form 3X, 2007-?0 15 Reports, available at http: '/doeguer\". tee.go\' egi-bin 'fecim!!./?C004364I O.

11

judgment, or may create an appearance of impropriety that may undermine the
public's faith in government. 82
Although it is unknown whether Sen. Corker has used his official position to benefit
CBL, UBS and/or any of their executives, the receipt of stock tips from company insiders creates
exactly the sort of appearance of impropriety that the Gift Rule was designed to address.
STOCK Act
Congress unambiguously affirmed that "Members of Congress are not exempt
from the insider trading prohibitions arising under the securities laws" when it enacted
the Stop Trading on Congressional Knowledge Act ("STOCK Act"). 112 P.L. 105, 126
Stat. 291, 292. In 2012, Congress amended the Securities Exchange Act of 1934
("Exchange Act") to state:
[F]or purposes of the insider trading prohibitions arising under this Act, including
section 1O(b) and Rule 10b-5 thereunder, each Member of Congress or employee
of Congress owes a duty to the Congress, the United States Government, and the
citizens of the United States with respect to material, nonpublic information
derived from such person's position as a Member of Congress or employee of
Congress or gained from the performance of such person's official
responsibilities.
Exchange Act Section 21A(g)(1), 15 U.S.C. § 78u-l(g)(1). While this amendment
focused on members of Congress and congressional staff trading on information they
gained from their official positions, the Senate Ethics Committee also reiterated that
members and staff "are prohibited from insider trading based on information received
outside of their official duties. "83 The committee elaborated,
[I]f a corporate insider "tips" a Senator or staffer to trade in that corporation's
securities based on material, nonpublic information and the Senator or staffer
knew or should have known that there was a breach of the insider's fiduciary duty
to the corporation's shareholders, the Senator or staffer becomes subject to the
insider's duty and is prohibited from trading based on that confidential
information. 84
In addition to federal insider trading prohibitions, Sen. Corker's conduct appears
to violate the STOCK Act.
Conflict of Interest Rule
Senators are prohibited from using their official positions for their financial benefit.
Rule 37.1 provides:

82!d. at 21.
83 Senate Insider Trading Memo.
84 !d.

12

A Member, officer, or employee of the Senate shall not receive any compensation, nor
shall he permit any compensation to accrue to his beneficial interest from any source, the
receipt of which would occur by virtue of influence improperly exerted from his position
as a Member, officer, or employee.
This paragraph "should be read as a broad prohibition against members, officers or employees
deriving financial benefit, directly or indirectly, from use of their official positions."85
If, as it appears, Sen. Corker received stock tips because of his position as a senator, he
violated Rule 37.1.

Improper Conduct that Reflects Upon the Senate
The Senate Ethics Manual provides that U[c]ertain conduct has been deemed by the
Senate in prior cases to be unethical and improper even though such conduct may not necessarily
have violated any written law, or Senate rule or regulation. Such conduct has been characterized
as "improper conduct which may reflect upon the Senate."86 This rule is intended to protect the
integrity and reputation of the Senate as a whole. 87 The Ethics Manual explains that "improper
conduct" is given meaning by considering "generally accepted standards of conduct, the letter
and spirit of laws and Rules ... "88 The Senate Ethics Committee has stated that
those who intentionally use confidential information coming to them by virtue of their
Senate responsibilities or position to make a profit or avoid a loss or to assist others to do
so, will be deemed to have violated ethics standards and rules, engaged in conduct
reflecting discredit on the Senate, and potentially violated securities laws and
regulations. 89
If, as it appears, Sen. Corker intentionally used confidential information to make profits
and avoid losses on CBL stock, he engaged in improper conduct that reflects discreditably on the
Senate.
The Select Committee on Ethics also has the option of criticizing Sen. Corker's conduct.
On some occasions, the Committee has stopped short of finding that alleged conduct was
"improper conduct reflecting upon the Senate," but has found "that the conduct should not be
condoned or should otherwise be criticized in a public statement by the Committee."9O For
example, the Committee has found that: a senator's "interven[tion] with regulators gave the
appearance of being improper and was attended with insensitivity and poor judgement," that a
1d.
86 Senate Select Committee on Ethics, Improper Conduct Reflecting Upon the Senate and General Principles of
Public Service, Senate Ethics Manual, Appendix E, p. 432.
87 1d.
88 Id. at 433; see also fu. 10 citing a 1964 investigation into the activities of Bobby Baker, then Secretary to the
Majority of the Senate, the Committee on Rules and Administration, which stated, "It is possible for anyone to
follow the 'letter of the law' and avoid being indicted for a criminal act, but in the case of employees of the Senate,
ther, are expected, and rightly so, to follow not only the 'letter' but also the 'spirit' of the law." S. Rep. No. 1175,
88 11 Cong., 2d Sess. 5 (1964).
89 Senate Insider Trading Memo.
90 Senate Ethics Manual at 435.
85

13

senator "exercised poor judgment in intervening with regulators," and that another senator
conducted office business "in an inappropriate manner. .. "91 Therefore, even if the Committee is
not persuaded Sen. Corker's conduct reaches the level of improper conduct, at the very least, the
Committee should issue a public statement criticizing his conduct.
Conclusion
Over the course of only two years, from 2010 to 2012, the total value of Sen. Corker's
trades of CBL stock was somewhere between $45 million and $213 million. Based on
significant dollar figure involved, the high volume of trades of just that one stock, the unusually
auspicious timing of many of the trades, the failure to report the trades in a timely fashion, Sen.
Corker's deep ties to CBL and UBS, and the fact that as a member of the Senate Banking
Committee he is positioned to be of service to CBL and UBS 92 , an investigation into whether
Sen. Corker engaged in insider trading, knowingly failed to report his trades, and violated Senate
ethics rules is clearly warranted.
We look forward to your prompt investigation of this matter.

Anne L. Weismann
Executive Director

Encls.
cc:

Raymond Hulser
Chief, Public Integrity Section
Department of Justice

Id., fn. 19.
As a senior member ofthe Banking Committee, Sen. Corker also has oversight jurisdiction of the SEC.
Continuing in that role may be inappropriate given the circumstances.
91

92

14

EXHIBIT A

Sen. Bob Corker Profits on Quick Stock Trades - WSJ

http://www.wsj .com/artic les/sen-bob-corker-profits-on-qu ick -stock -t. ..

THE WALL STREET JOURNAL.
This copy is for your personal. non-commercial use only. To order presentation-ready copies for distribution to your colleagues . clients or customers visit
http://www.djreprints.com .
http://www.wsj.com/articles/sen-bob-corker-profits-on-quick-stock-trades-1446596135

POLITICS

Sen. Bob Corker Profits on Quick
Stock Trades
Tennessee Republican discloses a dozen previously unreported share purchases in a
little-known real-estate firm

Tennessee Sen. Bob Corker, shown in July, says he is 'extremely disappointed in the filing errors.'

PHOTO:

JONATHANERNS~REUTERS

By BRODY MULLINS and TOM MCGINTY

Updated Nov. 3, 2015 8:08 p.m. ET

WASHINGTON-In the course of his Senate career, Republican Sen. Bob Corker
of Tennessee has made many short-term trades in shares of a little-known
Chattanooga real-estate company.
Until recently, he hadn't made public a dozen stock purchases in the firm,
including several that resulted in his most profitable investments.
In one previously unknown purchase, Mr. Corker purchased between $1 million
and $5 million in shares of the firm, CBL & Associates Properties Inc., in late
2011 and sold them five months later for a 42% gain. A pair of purchases in 2009

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Sen. Bob Corker Profits on Quick Stock Trades - WSJ

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in accounts in the name of his daughters likely netted more than $1 million,
though in that case the exact gain is impossible to calculate.
The trades are among the CEL stock purchases that Mr. Corker disclosed only
recently after questions from The Wall Street Journal about apparent
discrepancies in his Senate financial-disclosure reports. Congressional ethics
rules require lawmakers to make public their financial investments in broad
ranges each year.
Some of Mr. Corker's newly disclosed trades came during a period of heightened
scrutiny of financial investments by members of Congress and as Mr. Corker was
preparing to run for re-election in 2012.
In a written statement to the Journal last week, Mr. Corker said he was
"extremely disappointed in the filing errors that were made in these earlier
reports where the accounting firm mistakenly used realized gain/loss
methodology instead of the Senate financial disclosure guidelines."
As a result of the mistakes, Mr. Corker said, "in a few cases, only the sale and gain
or loss of the transaction was reported. As a result of this inquiry, and after
completing a full review, we are correcting this oversight."
Congressional ethics
rules allow lawmakers
Buy Low, Sell High
to invest injust about
Sen. Bob Corker (R., Tenn.) routinely bought the stock of Tennessee
real-estate firm CBL at a low level and sold it at a higher price.
any company, as long
Closing price for CBL
o Corker purchases stock
as they aren't trading
June 2010-June 2012
o Corker sells stock
based on inside
$20 per share
information and they
July 8, 2010:
o
UBS Securities
o
disclose their
18 raises outlook
co
0
of stock
(;)
investments.
o
o
0
16
Lawmakers contend
°
o
(;)
they should be allowed
o
Nov. 29, 20ll:
14
to trade stocks,
o
o
Corker didn't
disclose the
.
because a ban would
0
o
purchase of
12
0
<D
$1 million to
"insulate a legislator
(;)
Aug. 5, 2010; UBS
$5 million until
downgrades stock
Oct. 16, 2015.
from the personal and
10
h2 ' , , ,
economic interests
2010
""
I'll' , , ,
that his or her
TilE WALL STHEET .IOUHNAL.
Source: Senate Financial Disclosure Reports
constituency, or
society in general, has in governmental decisions and policy," as the rules put it.

o to

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Sen. Bob Corker Profits on Quick Stock Trades - WSJ

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There are no penalties for making fixes to disclosures, a frequent occurrence,
because ethics regulators want to encourage lawmakers to correct mistakes.
The new disclosures are the latest twist in Mr. Corker's history with CBL, a
publicly traded company that he knows well. Mter college, he worked for a
company that constructed buildings for CBL. He later started his own
construction company and then invested in shopping malls and office bUildings.
Several CBL executives have donated to his campaigns. CBL didn't respond to
requests for comment.
On entering the Senate in 2007, Mr. Corker had a diverse portfolio including
hundreds of widely owned Fortune 500 corporations. In recent years, CBL has
been one of the few stocks he has traded.
Mr. Corker has bought or sold CBL stock 45 times. His wife and two daughters
made 25 additional CBL trades in accounts in their names, according to Mr.
Corker's office and his financial-disclosure forms.
Mr. Corker made between $1 million and $5 million on CBL trades in both 2010
and 2012, the disclosures show. However, he could have lost money in other
years; senators are required to disclose annual profits, but not losses, on
investments.
In 20n, the Journal published a story that mentioned Mr. Corker's frequent
trading in CBL. In a statement for that story, he said he had "watched the trading
range on this hometown-based stock" and "found that especially during times of
market volatility it trades within wide ranges." He added: "I've bought it heavily
when it is at the low end of that range and then I hold it until there is upward
movement, when I sell."
Mr. Corker's spokeswoman, Tara DiJulio, said the CBL investments "have been
public dating back to 2007, and he even discussed with The Wall Street Journal
in a 2011 interview how he watches the volatility of this stock."
Mr. Corker's successful strategy was on display in March 2009- in one of the
previously undisclosed trades-when CBL stock traded near its low of $2.07. On
March 9,2009, accounts in the name of Mr. Corker's daughters made a pair of
purchases of CBL stock worth a total of $200,000 to $500,000.
The first time any CBL shares were sold from that account, on May 12, 2010, the
stock had risen more than sevenfold to about $16. That trade very likely netted a
gain of at least $1 million.

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Mr. Corker's office said losses on other CBL trades in his children's accounts in
2010 wiped out that gain. The same accounts had paid about $24 a share for
more than $2 million of CBL shares in 2008, and those trades most likely
suffered significant losses.
Other previously disclosed trades successfully took advantage of movements in
the company's stock. In three June and July 2010 trades, Mr. Corker bought a
total of between $3 million and $15 million in CBL shares. The day after the last
trade, the stock rose when investment-research firm UBS Securities said it was
upgrading its outlook. From July 7 to July 26, when Mr. Corker started to sell the
stock, it was up 18.3%.
Disclosure records show Mr. Corker sold two stakes worth a total of between $2
million and $10 million on July 26 and 27. The following week, UBS issued
another analysis, this time downgrading the stock. The share price declined
about 10% over the following week.
UBS declined to comment on the matter.
Other investment analysts were split in their projections of CBL stock.
Some of Mr. Corker's investments coincided with a time of scrutiny over
lawmakers' investments. In November 2011, CBS's "60 Minutes" broadcast an
investigation into stock trading by lawmakers, giving momentum to a
long-stalled bill that made it illegal for lawmakers to trade stocks based on
inside information.
For one of Mr. Corker's most-profitable trades, it was impossible until recently
to calculate the return on his investment. His original financial disclosure for
2011 indicated he didn't own CBL stock at the end of the year. That turned out to
be incorrect. In August 2013, he filed an amendment saying that at the end of
2011, he owned shares worth between $1 million and $5 million. However, the
senator didn't disclose the precise date of the purchase or the amount of the
transaction. Mter being contacted by the Journal in October, Mr. Corker's office
filed an amendment showing that he bought $1 million to $5 million of CBL stock
on Nov. 29, 2011. The stock rose 6.7% the next day and, over the following
months, it rose steadily, buttressed by a number of positive events.
Mr. Corker sold his entire CBL stake for between $5 million and $25 million in
May 2012, according to the filings. The sale of the stock purchased on Nov. 29
netted him a profit of somewhere between $420,000 and $2.1 million.

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11/4/20158:53 AM

Sen. Bob Corker Profits on Quick Stock Trades - WSJ

http://www.wsj.com/artic les/sen-bob-corker-profits-on-q u ick-stock-t. ..

Mr. Corker has continued to invest in CBL since.
Write to Brody Mullins at brody.mullins@wsj.com and Tom McGinty at
tom.mcginty@wsj.com

Copyright 2014 Dow Jones & Company. Inc. All Rights Reserved
This copy is for your personal, non-commercial use only Distribution and use of this material are governed by our Subscriber Pgreement and by copyright law For
non-personal use or to order multiple copies. please contact Dow Jones Reprints at 1-800-843-0008 or visit wwwdjreprints .com .

50f5

11 /4/20158:53 AM

EXHIBITB

9/1/2015

Lawmakers Lose in Markets - WSJ

THE WALL STREET JOURNAL.
This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit
http://www.djreprints.com.
http://www.wsj.com/articles/SB 10001424052970203899504577126940157408980

MARKETS

LaWlnakers Lose in Markets
Analysis Shows That Some Members of Congress Should Elect Not to Trade
By BRODY MULLINS, JASON ZWEIG and TOM MCGINTY

December 30, 2011

Amid the controversy about stock trading on Capitol Hill, one element has largely been
overlooked: Some members of Congress aren't particularly good at it.
Scores oflawmakers from both political parties bought and sold stocks actively last
year, according to an analysis of congressional financial disclosures. Many would have
been better off if they hadn't.
Sen. Bob Corker, a Tennessee Republican, earned more than $1
million on dozens of short-term trades in a real estate investment
trust -but would have doubled that total had he simply bought
and held, according to an analysis of his disclosure form.
Sen. Tom Coburn CR., Okla.) made more than 200 trades in stocks
and bonds in 2010, and says he has lost money trading in each of
the seven years he has been in Congress.

Bob Corker

Rep. Luis Gutierrez, an Illinois Democrat, made dozens of trades
in stocks and mutual funds, including two instances in which he
bought and sold a fund in the same day, even though the share
price of mutual funds doesn't fluctuate within the same day.

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"If the congressman ever writes a book, it will not be about how to get rich playing the
market from your laptop," said Douglas Rivlin, the congressman's spokesman.

Over the past two years, The Wall Street Journal has examined
thousands of records of congressional trades using annual
financial-disclosure reports collected by LegiStorm.com, a
nonpartisan firm devoted to increasing transparency on Capitol
Hill.
The Journal found that more than 50 members of Congress
traded actively or reported especially large transactions in 2010.
Few appeared to make much money on the trades, and many
suffered losses. Trading reports for 2011 won't be available until
next year.
Tom Coburn

The latest information comes amid growing concern that
lawmakers could invest based on information they acquire in
their positions in government. I t also shows that in many cases, members of Congress
make common investment mistakes despite their seeming advantage of possessing
information not readily available to other investors.
There have been conflicting studies on the topic, but a recent
paper by Jens Hainmueller of the Massachusetts Institute of
Technology and Andrew Eggers of the London School of
Economics examined congressional investing portfolios from
2004 through 2008 and found that the average investor in
Congress lagged behind the market by 2% to 3% annually.

Luis Gutierrez

Last year the Journal reported that several members of Congress
and their aides in 2008 and 2009 had traded shares of companies
they helped oversee in their official duties, in many cases reaping
profits. These congressional members and aides said they didn't
use inside information.

Congressional ethics rules, adopted in the 1960s, allow lawmakers
to vote on legislation that affects their financial holdings; they are required simply to
disclose their stock trading and ownership annually.
Legislation is gaining steam on Capitol Hill to change those rules. A House bill written
by Rep. Louise Slaughter (D., N.Y.) would ban lawmakers from making trades based on
http://www .wsj.com/articles/S8 1000 142~05297020389950457712b940 157408980

2/~

911/2015

Lawmakers Lose in Markets - W5J

information they gather in the halls of Congress. There is no evidence that the
lawmakers who traded actively in 2010 used information obtained from their positions.
The proposed legislation also would require lawmakers to disclose their trading within
90 days, instead of the current yearly disclosure. It has been endorsed by a majority of
House members. This month, a Senate committee approved similar legislation.
Mr. Coburn and his wife made more than 200 trades in stocks and bonds in 2010,
according to his financial-disclosure form. Among other bets, Mr. Coburn traded shares
of airline United Continental Holdings, telecom giant AT&T Corp. and Apache Corp. ,
an oil and gas company. Profits or losses couldn't be determined because they had not
sold their stocks by the end of the filing period.
Mr. Coburn, a medical doctor, says many of his trades were simply ways to get out of the
market and that much of his portfolio is now in cash.
"I've never been ahead since I've been in Congress," Mr. Coburn said in an interview. "So
if I'm using insider trading, I'm not very smart."
Mr. Gutierrez, a member of the House Financial Services Committee, opened his first
online brokerage account with Charles Schwab on May 10, 2010, according to his office
and public records. That day, the onetime teacher and social worker bought shares of
Berkshire Hathaway Inc., the trading records show. He sold Berkshire Hathaway shares
17 days later, the records show, at a 4% to 9% loss.
A day after the Berkshire purchase, Mr. Gutierrez bought a Schwab "target-date" fund
intended for investors with a 25-year investing horizon. He sold it two weeks later, for a
maximum pretax gain of $200, the records show.
In one instance, on Oct. 11, 2010, Mr. Gutierrez bought two mutual funds, and sold them
the same day, according to the disclosures. Such a trade can never be profitable,
financial advisers say, since a mutual fund's price is required under federal law not to
change during the trading day.
Mr. Gutierrez made more than a dozen sales of mutual-fund shares that he held less
than 90 days, according to the Journal's analysis of disclosure forms. Schwab generally
charges a short-term redemption fee of $49.95 on such sales.
In a statement, Mr. Rivlin, the congressman's spokesman, said Mr. Gutierrez tried
rapidly trading mutual funds" as experiments to see how fast they would grow," but that
http://www.wsj.com/articles/5B I 000 142~05297020389950457712b940 157~08980

9/1/2015

Lawmakers Lose in Markets - WSJ

"the experiments were failures and incurred
both fees and losses."
Mr. Corker, the Tennessee Republican, made 26
trades in CBL & Associates Properties, a
Chattanooga-based real-estate investment
trust. Mr. Corker, who was in the construction
and development business, worked for an
affiliate of CBL after college.
Sen. Bob Corker ASSOCIATED PRESS

A dozen times, Mr. Corker traded between $1
million and $5 million worth of CBL, according to trading records. Three transactions
were between $5 million and $25 million.
CBL and an index that tracks the Dow Jones Industrial Average are the only stocks Mr.
Corker trades. CBL is thinly traded, amplifying price swings.
"I've watched the trading range on this hometown-based stock and have found that
especially during times of market volatility it trades within wide ranges," Mr. Corker
said. "I've bought it heavily when it is at the low end of that range and then I hold it until
there is upward movement, when I sell."
CBL shares returned 89% in 2010. But because Mr. Corker jumped in and out of the
stock so many times, his capital gain was limited to between $1 million and $5 million.
That's a pretax profit of between about 2% and 40%. He declined to specify the
percentage.

Write to Brody Mullins at brody.mullins@wsj.com, Jason Zweig at
intelligentinvestor@wsj.com and Tom McGinty at tom.mcginty@wsj.com

Copyright 2014 Dow Jones & Company, Inc. All Rights Reserved
This copy is for your personal, non-commercial use only. Distribution and use of this material are govemed by our Subscriber Agreement and by copyright
law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.

http://www.wsj.com/articles/S8 1000 1424052970203899504577126940 157408980

41-1

EXHIBITC

UBS Upgrades Several REIT Stocks
57 words
8 July 2010
Streetlnsider.com
STINS
English
Copyright 2010 Streetlnsider.com. All Rights Reserved.
UBS upgrades AvalonBay Communities (NYSE: AVB) (PT$92),CBL & Associates (NYSE: CBL) (PT$12), Essex
Property Trust (NYSE: ESS)(PT$96), Post Properties (NYSE: PPS) (PT$23), and Realty Income (NYSE: 0)
(PT$30) from Sell to Neutral.
UBS upgrades Camden Property Trust (NYSE: CPT) (PT$48) from Neutral to Buy.
Document STINS000201 00708e67800051

Page 119 of 125 © 2015 Factiva, Inc. All rights reserved.

EXHIBITD

Chattanooga, Tenn., Mayor Proposes Property Tax Increase
Dave Flessner
596 words
22 August 2001
KRTBN Knight-Ridder Tribune Business News: Chattanooga Times/Free Press - Tennessee
KRTBN
English
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM)
Whether or not Mayor Bob Corker pays a political price for raising
city taxes, businessman Bob Corker will.

As the owner of one of Chattanooga's biggest land companies and one of
the city's largest residences, the city tax bill for Mr. Corker will
jump by more than $100,000 because of the property tax increase proposed
in the city budget he presented to the City Council on Tuesday.

"Some politicians say they "feel your pain." Well, Bob Corker really
will," said Robert Swansbrough, a UTC political science professor. "It
may help him defuse some of the political price you pay from raising
taxes, although it obviously won't satisfy some people who oppose any
type of tax increase."

Mr. Corker, a former commissioner of finance and administration under
Gov. Don Sundquist, acquired Chattanooga's two biggest commercial real
estate companies two years ago before being elected mayor in March of
this year. Through his purchase of Stone Fort Land Co. and Osborne
Enterprises in 1999 and his other real estate holdings, Mr. Corker is
the sixth largest property taxpayer in Hamilton County.

Among real estate developers, he ranks behind only CBl & Associates
and its related investments in Hamilton County, according to a list
prepared last fall by the Hamilton County Trustee's Office.
CBl owns Hamilton Place Mall, the state's biggest shopping complex,
and a half dozen other major retail and office developments in its home
town.

Mr. Corker has placed his business in a blind trust since he took
office at City Hall and he declined Tuesday to talk about the impact of
any property tax on his own property holdings. But Mr. Corker's
businesses -- now headed by Corker Group President Leigh Ferguson continue to own the Krystal, Tallan and Volunteer office buildings
downtown, the office complex next to Eastgate Town Center and more than
a dozen other offices, warehouses and stores along Riverfront Parkway
and in East Ridge.

"As a businessman operating these properties, we would love to have no
increase in taxes," Mr. Ferguson said. "But we realize that is not
achievable if we are going to have the kinds of city services that are
Page 6 of 22 © 2015 Factiva, Inc. All rights reserved.

available in Chattanooga . I do know in talking with property managers in
other cities that our taxes in Chattanooga are still relatively low."

Mr. Ferguson said Mayor Corker's proposal to boost the city's property
tax rate 24 percent "will have a significant cost for our business.

"But at this point, we are still in the process of analyzing how much
that will be and how we will handle it," he said.

Mayor Corker isn't the only one employed by City Hall feeling the
price of a possible property tax increase. The biggest taxpayer in
Hamilton County is the city-owned EPB, which will have to pay an
estimated $365,000 more because of the property tax increase and
reappraisal this year. EPB and its wholesale power supplier, the
Tennessee Valley Authority, are the two biggest taxpayers in
Chattanooga. As non-profit businesses, both utilities make
in-lieu-of-tax payments to the city and county based upon their revenues
and local holdings.

"We may be a non-profit business, but we are still the biggest
taxpayer in Hamilton County and very proud of it," EPB President Harold
DePriest said.

Mr. DePriest said EPB will work the extra tax expense in its budget
this year "and we don't plan any rate increase (in either electric or
telephone rates) as a result."
Document krtbn0002001 0822dx8m001 jl

Page 7 of 22 © 2015 Factiva, Inc. All rights reserved.

CAMPAIGN

FOR

ACCOUNTABILITY
March 21,2016
Andrew J. Ceresney
Director of Enforcement
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Honorable Johnny Isakson, Chair
Honorable Barbara Boxer, Vice Chair
Senate Select Committee on Ethics
Hart Building, Room 220
Washington, DC 20510

VIA FAX
Re: Supplemental Information on Senator Robert P. Corker, Jr.
Dear Mr. Ceresney, Chairman Isakson, and Vice Chairwoman Boxer:
On November 10, 2015, Campaign for Accountability ("CfA") sent you a letter
requesting an investigation into Senator Robert P. Corker, Jr. (R-TN), for insider trading, false
statements, and numerous violations of Senate ethics rules. Since that time, Sen. Corker has
filed amendments to his personal financial disclosure forms ("PFD"), indicating additional
potential violations of law. Most seriously, based on Sen. Corker's apparent effort to conceal the
underlying assets of funds in which he invested, CfA believes Sen. Corker may have shared
information - gleaned through his position in the Senate - with hedge fund managers for his (and
possibly their) personal financial benefit. The fact that the senator has longstanding personal
relationships with those who manage these funds - who also have donated generously to his
campaigns - lends further impetus to the need for an inquiry.
Background
In December, The Wall Street Journal reported that Sen. Corker had "failed to properly
disclose millions of dollars in income from real estate, hedge funds and other investments since
entering the Senate in 2007 ... ,,) Most significantly, Sen. Corker failed to disclose at least $2
million in investments in three Tennessee-based hedge funds. 2

Brody Mullins. Sen. Bob Corker Failed to Properl y Disclose Millions of Dollars in Income, The Wall Street Journal. December
13, 2015 available at http://www. wsLcom/articles/sen-bob-corker-failed-to-propcrly-disclose-millions-of-dollars-in-income1450051046.
.
2 /d.
I

1201 Connecticut Avenue, N.W.

Suite 300

Washington, D.C. 20036

www.campaignforaccountabi I ity. 0 rg

(202) 780-5750

Further, Sen. Corker has sought to qualify several funds with Pointer Management, LLC
("Pointer"), Gerber/Taylor Management Company ("Gerber/Taylor"), and TSWII Management
Company ("TSWII") as Excepted Investment Funds ("ElF"s) under Senate rules, thereby
exempting him from disclosing the funds' underlying assets. According to documents filed with
the Securities and Exchange Commission ("SEC") and the Senate ethics committee, however,
many of these funds do not qualify as EIFs.
Excepted Investment Funds
As you know, an ElF is a mutual fund, common trust fund of a bank, pension or deferred
compensation plan, pooled investment fund, such as a hedge fund, or any other investment fund
that meets three criteria: 1) it must be widely held; 2) it must be publicly traded/available or
widely diversified, and 3) the filer cannot exercise control over the underlying financial
interests. 3
According to the Senate PFD filing instructions, a holding is widely held "if it has more
than 100 participants or investors." A filer may count all individuals in the fund, including
partners, members and participants. 4
A holding is publicly traded or available if"it is open for investment by any member of
the public." While it need not be publicly traded, investment may not be limited to a small group
based on criteria other than minimum net worth or initial investment amount. 5 Alternatively, a
filer may invest in a fund that is not publicly traded or available as long as it is widely
diversified, meaning "no one security of an issuer (other than U.S. government) makes up more
than 5% of the portfolio and no particular economic or geographic sector makes up more than
20% of its portfolio.,,6
Finally, a holding can qualify as an ElF if it does not allow investors "to choose how the
fund is invested, to decide where and when the investments are made, or to make decisions about
administering the fund.,,7
If all three criteria are met, the filer need only "disclose the name of the fund, their
proportional share of its year-end value, and the type and amount of income earned during the
reporting period. The filer does not need to disclose the underlying assets of the fund or the
transactions that occurred within the fund." Any sale or purchase of an interest in the fund that
exceeds $1,000 must be reported.

Public Financial Disclosure Report for the United States Senate eFD Instructions. available at
http://www.ethics.senate.gov/public/indcx.cfm/files/serve?File id=98558990-0fa2-4880-8ffd-67728e7a7a69 (hereinafter "PFD
Instructions").

J

4

lei.

5

Id.

61d.

7/d.

2

If the fund does not meet the definition of an ElF, however, the filer must:
list each of the assets held in the financial arrangement (i.e., the specific stocks, mutual
funds, or other assets in which [the filer] is invested within the account) that meet the
reporting thresholds, disclose the individual value of each of those holdings at the end of
the reporting period, and disclose the type and amount of income earned by each asset in
the account during the reporting period. Full disclosure of all required information for
some financial arrangements may require more than one entry.8
In determining whether a fund is properly categorized as an ElF, reviewing forms the
funds have filed with the SEC can be instructive. Many investment advisers register with the
SEC and state authorities by filing a Form ADV.9 On the Form ADV, investment advisers
provide information about private funds, including whether the fund qualifies for exclusion from
the definition of investment company under the Investment Company Act of 1940 and the
approximate number of the fund's beneficial owners. 10 In other words, the ADVs reveal whether
a fund has more than 100 participants and, therefore, whether it qualifies as an ElF.
Based both on letters Sen. Corker submitted with his PFDs as well as Form ADVs, it
appears several ofthe funds in which Sen. Corker has invested did not have more than 100
participants or investors as required to qualify as an ElF.

Gerber/Taylor Funds
On his 2013 PFD, Sen. Corker reported holdings in eight Gerber/Taylor funds. II He also
submitted a letter from Gerber/Taylor verifying that six funds ofthose funds: GT Emerging
Markets (QP) LP, GT Global Hedge LP, GT Partners, LP, GT Special Opportunities III, LP,
Midland International Equity QP Fund, LP, and Midland US QP Fund, LP, met the three ElF
criteria l2
Sen. Corker submitted a second letter verifying that two of the funds, GT MLP Fund, LP,
and Midland Fixed Income Fund, LP, were publicly available and that he had no financial
control over them. The letter did not state, however, that the funds had more than 100
participants or investors. 13

BId.
15 u.s.c. §§80b-3. 80b-4.
10 See https:llwww.sec.gov/aboutlforms/formadv-partla.pdf.
II Sen. Robert P. Corker Jr., Personal Financial Disclosure Form for 2013. filed August 6,2014, available at
http://pfds.opensecrets.org/N00027441 2013.pdf.
12 Letter from David G. East. Secretary, Gerberrraylor Management Company to Sen. Robert P. Corker. Jr., July 31, 2014
(attached as Exhibit A).
IJ Letter from David G. East. Secretary. Gerberrraylor Management Company to Sen. Robert P. Corker. Jr., July 31 , 2014
(attached as Exhibit B).
9

3

Sen. Corker's holdings in Gerberrraylor funds remained the same in 2014, though three
of the funds' names changed. 14 With his 2014 PFD, he submitted a letter verifying that six funds
- though not the exact same six funds as in 2013 - met all the criteria for an ElF, 15 as well as a
second letter verifying that two funds - also with one change since 2013 - met two of the
criteria. 16
The 2014 letter indicated that GT Emerging Markets (QP), LP, GT Global Hedge LP, GT
Partners LP, GT MLP Fund, LP, GT International Equity QP Fund, LP (previously Midland
International Equity QP Fund, LP on the 2013 PFD), GT US QP Fund, LP (previously Midland
US QP Fund, LP on the 2013 PFD), GT Special Opportunities III, LP, and GT Fixed Income
Fund, LP (previously Midland Fixed Income Fund, LP on the 2013 PFD) met all three criteria I 7
The second letter stated that GT Special Opportunities III, LP, and GT Fixed Income
Fund, LP (previously Midland Fixed Income Fund, LP on the 2013 PFD) met two of the three
criteria. IS Thus, in 2013 , Sen. Corker had claimed the GT Special Opportunities III, LP fund had
met all the criteria, but suddenly did not in 2014. Conversely, he had indicated that GT MLP
Fund LP had not met all three criteria in 2013, but did in 2014.
Gerber/Taylor's filings with the SEC for 2013 and 2014 appear to confirm that GT
Special Opportunities III, LP and GT Fixed Income Fund, LP did not meet the ElF requirements
in either year. Neither did the GT MLP Fund, which the senator had included as an ElF in 2014
but not 2013. 19 The firm's Form ADV for the GT Fixed Income Fund, LP reported only 45
beneficial owners in 2013 and 43 in 2014. The GT Special Opportunities Fund reported just 56
in 2013 and 91 in 2014, and the GT MLP Fund reported 67 in 2013 and 86 in 2014. 20
Inexplicably, although Gerber/Taylor had verified in a letter to Sen. Corker that GT
Emerging Markets (QP) LP, and GT US QP Fund, LP had more than 100 participants, the firm's
2013 Form ADV states those funds also had fewer than 100 beneficial owners that year. 21
In summary, Sen. Corker inaccurately listed some of his funds as EIFs when they were
not, and even on those he admitted were not EIFs, failed to disclose the underlying assets in
those funds as required. Sen. Corker should have reported the underlying assets in five
Gerber/Taylor funds: GT Special Opportunities III, LP, GT Fixed Income Fund, LP, GT MLP
Fund, GT Emerging Markets (QP) LP and GT US QP Fund, LP.
14 See Sen . Robert P. Corker Jr., Personal Financial Disclosure Form For 20 14, tiled May 14,2015, available at
https://efdsearch.senate.gov/search/view/annuallf81 04 f9 5-4da2-40fe-a I as-36m dOccf50/.
15 Letter from David G. East, Secretary, Gerber/Taylor Management Company, to Sen. Robert P. Corker, Jr., May 12,2015
(attached as Exhibit C).
16 Letter from David G. East, Secretary, Gerber/Taylor Management Company, to Sen. Robert P. Corker, Jr., May 12, 2015
(attached as Exhibit D).
17 2013 and 2014 PFDs.

181d.
See GerberlTaylor Management Company. Form ADVs. tiled April I, 2013 and March 31 , 2014 (relevant pages attached as

19

Exhibit E and F, respectively).

2°1d.
21

GerberlTaylor 2013 Form ADV.

4

On December 15,2015, the senator filed amendments to his 2013 and 2014 PFDs. At
that time, apparently to conform with the July 31, 2014 letter submitted with his original 2013
PFD, he disclosed the underlying assets ofGT MLP Fund LP and GT Fixed Income Fund LP.22
He still failed to disclose the underlying assets in GT Special Opportunities III, which did not
appear to qualify as an ElF in 2013 and did not qualify as an ElF in 2014 according to the May
12, 2015 Gerber/Taylor letter. 23 He also failed to disclose the underlying assets of the GT
Emerging Markets Fund and GT US QP Fund LP, which do not appear to have qualified as ElFs
in 2013. 24
Further, the underlying assets disclosed in the new amendment are comprised mostly of
other additional private funds that do not appear to qualify as EIFs. For the GT MLP Fund LP,
Sen. Corker lists only two underlying assets, RCH Energy MLP Fund, and Corbyn Investment
Management Separate Account. 25 Therefore, even after pledging to fix the "accounting errors"
that led to his inaccurate PFDs, Sen. Corker still may not have disclosed his Gerber/Taylor assets
in compliance with the law.

TSWII Funds
Sen. Corker disclosed holdings in TSWII, L.P. each of the past 11 years, yet TSWII, L.P.
declared only 98 beneficial owners in its March 10,2015 Form ADV.26 Nevertheless, Sen.
Corker filed a letter with the Senate ethics committee from TSWII dated May 6, 2015, in which
TSWII claims the TSWII, L.P. had more than 100 participants or investors. 27 This represents a
change from the fund's March 2014 filing in which it claimed 102 beneficial owners.28
If the ADV accurately reveals TSWII, L.P.'s number of clients in fiscal year 2014, Sen.
Corker was clearly in violation of the ElF requirements, as he held the fund the entire year until
he sold it on December 31,2014. Even, however, if the ADV reflects the number of investors in
TSWII, L.P. on the date it was filed rather than in the previous fiscal year, the fund may have
dropped below 100 clients during the period Sen. Corker held it. 29
Before the enactment of Dodd-Frank, TSWII did not file a Form ADV. As a result, there
are no public records available to confirm whether or not TSWII met the ElF requirements in the
years 2004-2011 as Sen. Corker claimed in his previously filed PFDs. Given the numerous

Sen. Robert P. Corker Jr., Amendments to 2013 and 2014 PFDs, filed December 11,2015, available at
https:llefdsearch.senate. gov/search/view/annual/c94609dd-41 a9-46f1-baf5-3 ba507653 3 Sci, and
https:llefdsearch.senate.gov/search/view/annuaI!3e6b I ccO-4406-4Sc5-S2c l-aS565Sfc6246/.
231d.; see Gerberffaylor 2013 Form ADV.
24 See Gerber/Taylor 2013 Form ADV.
25 See Sen. Robert P. Corker Jr., Amendment 2 to Personal Financial Disclosure Form for 2013, filed December II, 2015,
available at https:llefdsearch.senate.gov/search/view/annual/c94609dd-41 a9-46f1-baf5-3ba5076533Sc/.
26 TSWII Management Company, 2015 Form ADV, filed March 10,2015 (relevant pages attached as Exhibit G).
27 Letter from L.H. Caldwell, III, President ofTSWII Management Company, to Sen. Robert P. Corker, Jr., May 6,2015
(attached as Exhibit H).
28 See TSWII Management Company, 2014 Form ADV, filed March 17,2014 (relevant pages attached as Exhibit I).
29 See Sen. Robert P. Corker Jr.. 2014 PFD.
22

5

inaccuracies in the senator's forms, further inquiry into whether TSWII LP was, in fact, an ElF,
or whether Sen. Corker should have disclosed the fund's underlying assets is warranted.

Pointer Funds
In Sen. Corker's 2012 and 2014 PFDs, he disclosed an asset in Pointer LP of $5-$25
million. 3o Yet in neither year did he disclose the underlying assets of the fund although it
appears to have had fewer than 100 investors. 31 This may simply have been an error: from 20062011, and in 2013, Sen. Corker disclosed an asset in another Pointer fund, Pointer (QP) LP, so
the senator might have confused the funds. Given all of the other issues with Sen. Corker's
disclosures, however, this bears clarification.
Sen. Corker's Undisclosed Gains
In addition to the question of whether Sen. Corker failed to reveal assets in funds that do
not qualify as EIFs, the senator also appears to have failed to accurately report financial gains
made in those funds. According to The Wall Street Journal, Sen. Corker failed to include a gain
of between $304,000 and $1.4 million in a Gerber/Taylor fund on his 2014 PFD.32 In 2013, the
senator failed to disclose a gain of between $100,001 and $1 million in TSW II, and in 2012, he
reported a gain of $1 00,00 1 to $1 million in Pointer (QP) LP, rather than the $1.2 million he
actually reaped. 33
Sen. Corker also failed to reveal a 2014 GerberlTaylor investment of between $500,001
and $1 million and a 2013 investment in Pointer between $1 and $5 million. 34
Sen. Corker's Ties to Hedge Fund Leadership
Since 2004, the top employees of Pointer, Gerber/Taylor, and TSWII and their families
have donated $204,020 to Sen. Corker's Senate campaigns and $75,000 to his Rock City
leadership PAC. 35 The three funds' owners were among the finance chairs of Sen. Corker's

See Sen. Robert P. Corker Jr., Personal Financial Disclosure Form for 2012, tiled August 12,2013, available at
http://pfds.opensecrets.orgfN00027441 20 12.pdf; 2014 PFD.
) I From 2006-20 II , and in 2013. Sen. Corker disclosed an asset in the Pointer (QP) LP Fund, which is a separate fund distinct
from the Pointer LP Fund, in which he disclosed an asset in 2012 and 2014. See Sen. Robert P. Corker Jr., Personal Financial
Disclosure Forms for 2006-20 II and 2013. available at http://www.opensecrets.org/pfds/candlook.php?txtName=Corker.This is
significant because Pointer LP 's Form Os. tiled with the SEC, indicate that the fund has fewer than 100 investors. See
https://www.sec.gov/cgi-bin/browse-edgar?company=pointer+Ip&owner=exclude&action=getcompany. Therefore, Sen. Corker
was required to reveal the underlying assets in the fund .
J2 Mullins, The Wall Street Journal. Dec. 13. 2015.
J3 Id.
341d.
35 Bob Corker for Senate 2018. Inc., FEC Form 3. 2006-2015 Reports, available at http://docguery.fec.gov/cgibin/tecimg/?C00430462; Bob Corker for Senate, FEC Form 3. 2004-2010 Reports, available at http://docguery.fec.gov/cgibin/fecimg/?C00407650; Rock City PAC. FEC Form 3X. 2007-2015 Reports, available at http://docguery.fec.gov/cgibin/fecimg/?C004364I O.
)0

6

initial Senate campaign. 36 Notably, Sen. Corker's financial ties to the three hedge funds are
analogous to his relationship with CBL & Associates Properties ("CBL"), a real estate
investment trust based in Chattanooga, TN, and the subject ofCfA's November 2015 letter.
Pointer was founded in 1990 by Joseph Davenport, a Chattanooga-area businessman and
former Coca-Cola executive, and Thorpe McKenzie, also from Chattanooga. 37 TSWII was
founded in 1990 by L.H. Caldwell III, also a Chattanooga businessman. According to
biographies of Mr. Caldwell available online, he was introduced to hedge funds in the 1970s by
Mr. McKenzie, who then ran a fund called Tiger and managed money on Mr. Caldwell's
behalf. 38 In 2004, Sen. Corker named Mr. Davenport and Mr. Caldwell among the co-chairs of
his campaign committee ahead of his 2006 election. 39
Pointer and TSWII have contributed substantially to Sen. Corker's campaigns since his
arrival in the Senate. Mr. Caldwell and his family have donated $73,280 to Sen. Corker since
2004, and Mr. Caldwell has also donated $15,000 to Rock City PAC, and his wife donated
$5,000. 40 Pointer employees and their spouses have contributed $76,840 to Sen. Corker's
campaigns and $55,000 to Rock City PAC. 41
Notably, Mr. Caldwell has four children who also have contributed to Sen. Corker's
campaigns: Katharine "Kate" Caldwell Nevin, born in 1976, Elizabeth "Betsy" Caldwell Cake,
born in 1980, Charlotte Caldwell, born in 1983, and Joseph Hardwick "JH" Caldwell, born in
1985.42 The three younger children made 13 contributions to Sen. Corker's campaigns between
December 2004 and March 2011. 43 The occupation of the children for all of these contributions
is listed as "student" and the address provided is the Caldwell family home in Lookout
Mountain, Tennessee. 44

Corker Running Senate Campaign Out of Volunteer Building, The Challanoogan. November 17, 2004, available at
http://www.chattanoogan.com/2004111 117/5880 I ICorker-Running-Senate-Campaign-Out-Of.aspx.
J7 See W. Thome McKenzie, Bloomberg Business, available at
http://www.bloomberg.com/research/stockslprivate/person.asp?personld=724686&privcapld= 11942163&prcviousCapld=216818
432&prcviousTitle=XBIOTECH%20INC.
38 See University of Tennessee at Chattanooga, Entreprencurship Hall of Fame 2007, available at http://www.utc.cdu/collegebusiness/news-evcntslannual-events/hall-of-fame/hof-2007.php.
39 The Challanoogan, Nov. 17,2004.
40 Bob Corker for Senate 2018, Inc., FEC Form 3. 2006-2015 Reports, available at http://docguery.fec.gov/cgibin/fccimg/?C00430462; Bob Corker for Senate, FEC Form 3. 2004-2010 Reports, available at http://docguery.fec.gov/cgibin/fccimg/?C00407650; Rock City PAC, FEC Form 3X. 2007-2015 Reports, available at http://docgucry.fec.gov/cgibin/fecimg/?C004364I O.
41 Id.
42 Id.; http://www.utc.edu/college-business/ncws-cvents/annual-events/hall-of-fame/hof-2007.php.
43 Bob Corker for Senate 2018, Inc., FEC Form 3. 2006-2015 Reports, available at http://docguery.fcc.gov/cgibin/fecimg/?C00430462; Bob Corker for Senate, FEC Form 3. 2004-2010 Reports. available at http://docguery.fec.gov/cgibin/fccimg/?C00407650.
36

44

lei.

7

On December 10, 2004, JH contributed $4,000 to Sen. Corker's campaign committee. 45 At
the time, he was a senior in high school and 19 years 01d. 46 On June 21,2005, when she was 22
years-old and had just graduated from college, 47 Charlotte contributed $4,200 to Sen. Corker's
campaign committee. 48 On May 31, 2007, JH, Betsy, and Charlotte each contributed $2,300 to
Sen. Corker's campaign, using their family address. 49 JH was then in college in North Carolina;
it is unclear where Betsy and Charlotte resided. 50 On March 31, 2011 (the last day of the filing
period), Betsy, Charlotte, and JH, all contributed $2,700 each to Sen. Corker's campaign
committee, listing their childhood address,s I but Betsy was living in New YorkY According to
their LinkedIn profiles, Charlotte and JH appear to have been moving back and forth between
New York and Chattanooga, and were both employed 53 not students as reported to the FEC. 54
Gerber /Taylor was founded by Charles Gerber and Andrew Taylor in 1990. Though
based in Memphis, it too has Chattanooga ties. According to Gerber/Taylor's Form ADV, like
TSWII its accounting is handled by the Chattanooga firm Elliot Davis Decosimo. 55 Like Pointer
and TSWII, Gerber/Taylor has long supported Sen. Corker's political fortunes: Gerber/Taylor's
employees and their spouses have contributed $44,700 to Sen. Corker's campaigns since he
launched his first Senate campaign. 56 In addition, Joseph Decosimo, his employees, and their
spouses have donated $49,463 to Sen. Corker's Senate campaigns since 2004 57 and his son Fred,
also with the accounting firm, served as vice chairman of Sen. Corker's 2006 campaign. 58
In total, employees for these three funds, their mutual accountant, and their respective
family members have contributed $253,483 to Sen. Corker's campaign committees since he first
ran for Senate, and an additional $75,000 to his PAC for a total of$328,483 .59

Bob Corker for Senate, FEC Form 3. 2004 Year-End Report. Amended, July 22, 2005. available al
http://docguery.fec.gov/pdt7198/25020341198/25020341198.pdfflnavpancs=O.
46 https:llwww.linkedin.com/in/hardwick-caldwell-46914732.
47 https:llwww.linkedin.com/in/charlotte-caldwell-b7138670.
48 Bob Corker for Senate, FEC Form 3. 2005 July Quarterly Report, July 13,2005, available al
http://docguery.fec.gov/pdf/585/25020262585/25020262585 .pdfflnavpanes=O.
49 Bob Corker for Senate 2018, Inc., FEC Form 3. 2007 July Quarterly Report, July 14, 2007, available al
http://docguery.fec.gov/pdf/ I 12/270202631 12/270202631 12.pdf#navpanes=0.
50 https:llwww.linkedin.com/in/hardwick-caldwell-46914732.
51 Bob Corker for Senate 2018, Inc., FEC Form 3. 20 II April Quarterly Report, April 15, 20 II , available 01
http://docguery.tec.gov/pdf/486111020143486111 020 I43486.pdfflnavpanes=0.
52 http://www.homes.timesfreepress.com/couplesl201IlmayIl5/.
53 https:/lwww.linkedin.com/in/hardwick-caldwell-46914732; https:llwww.linkedin.com/in/charlotte-caldwell-b7138670.
54 Bob Corker for Senate 2018, Inc., FEC Form 3. 20 II April Quarterly Report, April 15, 20 II , available al
http://docguery.fec.gov/pdf/486/11020143486111 020 I 43486.pdfflnavpancs=0.
55 See Gerber/Taylor Management, 2015 Form ADV, filed July 1,2015 (relevant pages attached as Exhibit J).
56 Bob Corker for Senate 2018, Inc., FEC Form 3. 2006-2015 Reports, available al http://docguery.fec.gov/cgibin/fecimg/?C00430462; Bob Corker for Senate, FEC Form 3. 2004-2010 Reports, available al http://docguery.fec.gov/cgibin/tecimg/?C00407650.
571d.
58 The Challanoogall, Nov. 17, 2004.
59 Bob Corker for Senate 2018, Inc., FEC Form 3. 2006-2015 Reports, available al http://docguery.fec.gov/cgibin/fecimg/?C00430462; Bob Corker for Senate. FEC Form 3. 2004-2010 Reports, available 01 hup :lldocguery.fec.gov/cgibinlfecimg/?C00407650; Rock City PAC. FEC Form 3X. 2007-2015 Reports. available al http://docguery.fec.gov/cgibinlfecimg/?C004364I O.
45

8

Legal Violations
Ethics in Government and False Statements Acts
The Ethics in Government Act of 1978 ("EIGA") requires all members of the Senate to
file a personal financial disclosure report with the Secretary of the Senate. 60 Senators must
disclose information regarding their financial and employment history, including sources of
income, gifts, and financial interests. 6 ) They also must disclose the receipt of gifts from any
source other than the U.S. government62 and report the identity of the source of the gift and the
value of gifts aggregating more than $375 in value from anyone source. 63 The name and address
of the source, as well as a description of the item and its value, all must be disclosed. 64
The EIGA authorizes the Attorney General to seek a penalty of up to $50,000 against an
individual who knowingly and willfully falsifies or fails to file or report any required
information. 65 Further, knowingly and willfully making any materially false, fictitious or
fraudulent statement on an EIGA filing is subject to criminal prosecution and up to five years
imprisonment under the False Statements Act. 66 In addition, Senate Rule 34 provides that Title I
ofEIGA is regarded as a rule of the Senate, subjecting violators to disciplinary action by the
Senate Ethics Committee. 67
Sen. Corker's financial disclosure forms - even as amended - continue to be inaccurate.
Most seriously, it appears that for many years, for many funds, Sen. Corker may have
deliberately claimed certain hedge funds in which he had invested were ElFs when they very
clearly were not. By misclassifying funds in this manner, Sen. Corker was able to avoid
revealing the underlying assets in these funds. The rule was enacted so that the public can
ascertain whether senators are trading in stocks related to matters over which they might have
inside information based on their government positions. Here, Sen. Corker's efforts to
camouflage his own investments suggest the possibility of wrongdoing.
CfA requests that the SEC determine whether the Gerber/Taylor, TSWII and Pointer
funds in which Sen. Corker invested met the ElF criteria and, if not, examine the underlying
assets of those funds and consider whether Sen. Corker may have deliberately attempted to
conceal the true nature of his investments to hide other wrongdoing.

5 U.S.c. app. 4, §§ 10 I(f), 103(h)( I )(A)(i)(I). EIGA further requires these reports to be disclosed to the public immediately
after they are submitted. Id. § 103(d).
6) Id. § 102.
62 PFO Instructions at 19.
631d. In 2011. filers were required to report gifts aggregating more than $335 and in 2012. they were required to report those
aggregating more than $350. See e.g., Sen. Robert P. Corker, Jr., Personal Financial Oisclosure Form for 20 II at 2. filed August
10,2012, available a/ http://ptas.opensecrets.org/N00027441 2011.pdf;2012 PFO.
64 PFO Instructions at 19.
65 Id. at 4 (citing 5 U.S.c. App. 4 § 104(a».
66ld.
67 PFO Instructions at I.
60

9

Conflict of Interest Rule
Senators are prohibited from using their official positions for their financial benefit.
Rule 37.1 provides:
A Member, officer, or employee of the Senate shall not receive any compensation, nor
shall he permit any compensation to accrue to his beneficial interest from any source, the
receipt of which would occur by virtue of influence improperly exerted from his position
as a Member, officer, or employee.
This paragraph "should be read as a broad prohibition against members, officers or employees
deriving financial benefit, directly or indirectly, from use oftheir official positions.,,68
If Sen. Corker received information as a result of his official position that he then shared
with Gerber/Taylor, TSW and/or Pointer, allowing the hedge funds, and by extension himself, to
make investments likely to reap positive returns, he may have violated Rule 37.1.
Improper Conduct that Reflects Upon the Senate
The Senate Ethics Manual provides that "[c]ertain conduct has been deemed by the
Senate in prior cases to be unethical and improper even though such conduct may not necessarily
have violated any written law, or Senate rule or regulation. Such conduct has been characterized
as "improper conduct which may reflect upon the Senate.,,69 This rule is intended to protect the
integrity and reputation of the Senate as a whole. 7o The Ethics Manual explains that "improper
conduct" is given meaning by considering "generally accepted standards of conduct, the letter
and spirit oflaws and Rules .. .'071 The Senate Ethics Committee has stated that
those who intentionally use confidential information coming to them by virtue of their
Senate responsibilities or position to make a profit or avoid a loss or to assist others to do
so, will be deemed to have violated ethics standards and rules, engaged in conduct
reflecting discredit on the Senate, and potentially violated securities laws and
regulations.72
If, as it appears, Sen. Corker deliberately mischaracterized funds as EIFs, thereby
allowing him to avoid disclosure rules, he engaged in improper conduct that reflects
681d.
69 Senate Select Committee on Ethics. Improper Conduct Reflecting Upon the Senate and General Principles of Public Service,
Senate Ethics Manual, Appendix E. p. 432.
70 Id.
71 Id. at 433; see also fn. \0 citing a 1964 investigation into the activities of Bobby Baker, then Secretary to the Majority of the
Senate, the Committee on Rules and Administration. which stated, "It is possible for anyone to follow the 'letter of the law' and
avoid being indicted for a criminal act. but in the case of employees of the Senate, they are expected, and rightly so, to follow not
only the 'letter' but also the 'spirit' of the law." S. Rep. No. 1175, 88 th Cong., 2d Sess. 5 (1964).
n Senate Select Committee on Ethics, Restrictions on Insider Trading Under Securities Laws and Ethics Rules, December 4.
2012. available at http://www.ethics.senate.gov/public/index.cfmlfilesiserve?File id=8c923399-2dc0-4ef6-aOd2-gef564fc7038.

10

discreditably on the Senate. Even more troubling, however, is the possibility that Sen. Corker
engaged in such artifice in order to hide much more serious misconduct: violating the public trust
by profiting from information he received in his role as a government servant.
Conclusion

Repeatedly over the course of many years, Sen. Corker blatantly failed to follow the rules
for EIFS and file accurate and thorough personal financial disclosure forms as the law requires.
At the same time, the value ofthe senator's holdings appears to have increased dramatically.
As CfA wrote in November, Sen. Corker's many auspicious trades in CBL and his long
relationship with members of the real estate firm and UBS suggested possible wrongdoing.
Now, a similar pattern can be seen in the senator's holdings in Gerber/Taylor, TSW, and Pointer,
and his relationships with members of those firms. As a member of the Senate Banking
Committee, Sen. Corker has been well positioned to learn information helpful to the hedge funds
in which he invested. An SEC and Senate ethics committee inquiry is clearly warranted.
We look forward to your prompt investigation of this matter.

Anne L. Weismann
Executive Director
Encls.
cc:

Raymond Hulser
Chief, Public Integrity Section
Department of Justice

II

EXHIBIT A

Gf.RHF.RlTAYLOR MANACI'MfNT CC

I

ON[ COMMf.KCt SQUt\R!:. SlJm I 'WI

M[MPHIS. HNNf.SSH ItlHH

401/.,)U,·'17'iri

July 31, 2014

FAX '11)1/';21.··1'1115

Senator Robert r. Corker, Jr.
P. O. Box 886
Chattanooga, TN 37401
Re:

GT Emerging Markets (QP). L.P.
GT Global Hedge, L.P.
GT Partners, l..P.
GT Special Opportunities III, L.P.
Midland Int~tioruU Equity QP Fund, L.P.
Midland US QP Fund. L.P.

Dear Senator Corker,
You have requested certain clarifications from us concerning the above listed funds (hereinafter
"GT Funds") to aid you in filing a United States Senate Financial Disclosure Report, for the year
ending 12/31/2013, with the Select Committee on Ethics.
We hereby verify that:
1. GT Funds have more than 100 participants or investors.

2. GT Funds are publicly available (subject to minimum nct worth requirements).

3. 'lbe investments are held under circumstances such that Robert P. Corker. Jr. can neither
exercise control nor have the ability to exercise control over the financial interest held by GT
Funds.
Sincerely,

D~

1r--

David G. East
Secretary
Ger::ber/Taylor Management Company
As General Partner to the GT Funds

EXHIBITB

C(I{BERlTAYlOR MANI\CfMENT CC

I

ONf COMMr:RCf. SQUAR£, 'iUIT( I<)()(
MEMPHIS. TfNNr'Ssr [ 1111 II 1

'lO"'o2('·'17'i1l

July 31, 2014

I AX '10 "'>2(,··IIB'o

Senator Robert P. Corker,Jr.
P. O. Box 886
Chattanoog.a, TN 37401
Re:

GT MLP Fund, L.P.
Midland Fixed Income Fund, IhP,

Dear Senator Corker,
You have requested certain clarifications from us concerning the above listed funds (hereinafter
"GT Funds'~ to aid you in filing a United States Senate Financial Disclosure Report, for the year
ending 12/31/2013, with the Select Committee on Ethics.

We hereby verify that:
1. GT Funds are publicly available (subject to mirumum net worth requirements).

2. The investments are held under circumstances such that Robert P. Corker, Jr. can neither
exercise control nor have the ability to exercise control over the financial interest held by GT
Funds.
Sincerely.

V-

~~17
David G. East
Secretary
Gerber/Taylor Management Company
As General Partner to the (;1' funds

EXHIBITC

GERBER
TAYLOR
May 12, 2015

Senator Robert P. Corker, Jr.
P. O. Box 886
Chattanooga, TN 37401
Re:

GT Emerging Markets (QP), L.P.
GT Global Hedge, L.P.
GT Partners, L.P.
GT MLP Fund, L.P.
GT International Equity OP Fund, L.P. - renamed In 2014, formerly Midland International Equity QP Fund, L P
GT US OP Fund, L.P. - renamed in 2014, formerly Midland US QP Fund, L.P

Dear Senator Corker,
You have requested certain clarifications from us concerning the above listed funds (hereinafter "GT
Funds") to aid you in filing a United States Senate Financial Disclosure Report, for the year ending
December 31.2014, with the Select Committee on Ethics.
We hereby verify that:
1. GT Funds have more than 100 participants or investors.
2. GT Funds are publicly available (subject to minimum net worth requirements).
3. The investments are held under circumstances such that Robert P. Corker, Jr. can neither exercise
control nor have the ability to exercise control over the financial interest held by GT Funds.

Sinnr~
David G. East
Secretary
GerberlTaylor Management Company
As General Partner to the GT Funds

EXHIBITD

GERBER
TAYLOR
May 12, 2015

Senator Robert P. Corker, Jr.
P.O.Box886
Chattanooga, TN 37401
Re:

GT Special Opportunities III, L.P.
GT Fixed Income Fund, L.P .. renamed in 2014, formerly Midland Fixed Income Fund, loP

Dear Senator Corker,
You have requested certain clarifications from us concerning the above listed funds (hereinafter "GT
Funds") to aid you in filing a United States Senate Financial Disclosure Report, for the year ending
December 31,2014, with the Select Committee on Ethics.
We hereby verify that:
1. GT Funds are publicly available (subject to minimum net worth requirements).
2. The investments are held under circumstances such that Robert P. Corker, Jr. can neither exercise
control nor have the ability to exercise control over the financial interest held by GT Funds.

Sipe~IY~
David G. East
Secretary
GerberlTaylor Management Company
As General Partner to the GT Funds

EXHIBITE

FORM ADV
UNIFORM APPLICATION FOR INVESTMENT ADVISER REGISTRATION AND REPORT
BY EXEMPT REPORTING ADVISERS
Primary Business Name: GERBER/TAYLOR MANAGEMENT

CRD Number: 109319

COMPANY
Annual Amendment - All Sections

Rev. 10/2012

4/1/2013 B:32:09 AM

WARNING: Complete this form truthfully. False statements or omissions may result in denial of your
-,
application, revocation of your registration, or criminal prosecution . You must keep this form
updated by filing periodic amendments. See Form ADV General Instruction 4.

f

Item 1 Identifying Information
Responses to this Item tell us who you are, where you are doing business, and how we can contact you.
A.

Your full legal name (if you are a sole proprietor, your last, first, and middle names):
GERBER/TAYLOR MANAGEMENT COMPANY

B.

Name under which you primarily conduct your advisory business, if different from Item 1.A.:
GERBER/TAYLOR MANAGEMENT COMPANY

List on Section 1.B. of Schedule 0 any additional names under which you conduct your advisory
business.
C.

If this filing is reporting a change in your legal name (Item 1.A.) or primary business name (Item
1.B.), enter the new name and specify whether the name change is of
your legal name or
your primary business name:

r
D.

r

(1) If you are registered with the SEC as an investment adviser, your SEC file number: BOl-5669B
(2) If you report to the SEC as an exempt reporting adviser, your SEC file number:

E.

If you have a number ("CRO Number") assigned by the FINRA's CRO system or by the lARD system,
your CRO number: 109319
If your firm does not have a CRO number, skip this Item 1 . E. Do not provide the CRO number of one
of your officers, employees, or affiliates.

F.

Principal Office and Place of Business
(1) Address (do not use a P.O. Box):
Number and Street 1:
ONE COMMERCE SQUARE
State:
City:
MEMPHIS
Tennessee

Number and Street 2 :
SUITE 1900
Country:
ZIP+4/Postal Code:
38103
United States

If this address is a private residence, check this box:

r

List on Section 1.F. of Schedule 0 any office, other than your principal office and place of
business, at which you conduct investment advisory business. If you are applying for
registration, or are registered, with one or more state securities authorities, you must list all of
your offices in the state or states to which you are applying for registration or with whom you
are registered. If you are applying for SEC registration, if you are registered only with the SEC,

Information About the Private Fund

1.

(a) Name of the private fund:
GT EMERGING MARKETS (QP), L.P.
(b) Private fund identification number:
(include the "805-" prefix also)
805-1535502417

2.

Under the laws of what state or country is the private fund organized:
State:

country:
United States

Delaware
3.

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity):

Name of General Partner, Manager, Trustee, or Director

i

t

GERBER/TAYLOR MANAGEMENT COMPANY

I
4.

The private fund (check all that apply; you must check at least one):

r

I

(1) qualifies for the exclusion from the definition of investment company under section 3( c)
(1) of the Investment Company Act of 1940

P'

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.
No Information Filed

- - - - - - - - - - --- - ---1
Yes No

6.

(a) Is this a "master fund" in a master-feeder arrangement?

r. r

(b) If yes, what is the name and private fund identification number (if any) of the feeder funds
investing in this private fund?

Private Fund Name
GT EMERGING MARKETS, L.P.

Private Fund Identification Number
805-5550106334

Yes No
(c) Is this a "feeder fund" in a master-feeder arrangement?

r r.

(d) If yes, what is the name and private fund identification number (if any) of the master fund in
which this private fund invests?
Name of the Private Fund:

Private Fund Identification Number:
(include the "80S-" prefix also)

NOTE: You must complete question 6 for each master-feeder arrangement regardless of whether
you are filing a Single Schedule D, Section 7.B.(1). for the master-feeder arrangement or
reporting on the funds separately.

I

II
7.
I I

I

If you are filing a single Schedule 0, Section 7.B.(1) for a master-feeder arrangement according
to the instructions to this Section 7.B.(1), for each of the feeder funds answer the following
questions:

No Information Filed
L_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

NOTE: For purposes of questions 6 and 7, in a master-feeder arrangement, one or more funds
("feeder funds") invest all or substantially all of their assets in a single fund ("master fund")_ A
fund would also be a "feeder fund" investing in a "master fund" for purposes of this question if it
issued multiple classes (or series) of shares or interests, and each class (or series) invests
substantially all of its assets in a single master fund.

Yes No
8.

(a) Is this private fund a "fund of funds"?
(b) If yes, does the private fund invest in funds managed by you or by a related person?

r. r
r.

r

NOTE: For purposes of this question only, answer "yes" if the fund invests 10 percent or more of
its total assets in other pooled investment vehicles, whether or not they are also private funds, or
registered investment companies.

Yes No
9.

During your last fiscal year, did the private fund invest in securities issued by investment
companies registered under the Investment Company Act of 1940 (other than "money
market funds," to the extent provided in Instruction 6.e.)?

r. r

10. What type of fund is the private fund?

r.:

hedge fund

fund

r

r

liquidity fund

venture capital fund

r

r

private equity fund

r

real estate fund

r

securitized asset

Other private fund

NOTE: For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part lA.
11. Current gross asset value of the private fund:
$162,34~

$ 186,807,459
I

Ownership

Ii
I'

12. Minimum investment commitment required of an investor in the private fund:
~

$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:

93
99
14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

I

II

If the answer to 26(a) is "yes," respond to questions (b) through (f) below. If the private
fund uses more than one administrator, you must complete questions (b) through (f)
separately for each administrator.

No Information Filed

-

............

_-_ ..

27. During your last fiscal year, what percentage of the private fund's assets (by value) was valued
by a person, such as an administrator, that is not your related person?

0%
Include only those assets where (i) such person carried out the valuation procedure established
for that asset, if any, including obtaining any relevant quotes, and (ii) the valuation used for
purposes of investor subscriptions, redemptions or distributions, and fee calculations (including
allocations) was the valuation determined by such person.

Marketers
28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?

Yes

No

r

r.

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other solicitor, or similar person . If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

1 '
No Information Filed

II

I
I

A. PRIVATE FUND

Information About the private Fund
1.

(a) Name of the private fund:
GT EMERGING MARKETS, loP.

I:

(b) Private fund identification number:
(include the "805-" prefix also)
805-5550106334

i
2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

II
3.

Country :
United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity):

Name of General Partner, Manager, Trustee, or Director
GERBER/TAYLOR MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

During your last fiscal year, did the private fund invest in securities issued by investment
companies registered under the Investment Company Act of 1940 (other than "money
market funds," to the extent provided in Instruction 6.e.)?
10. What type of fund is the private fund?
I

I

r.:

hedge fund

I

fund

r

r

liquidity fund

venture capital fund

r

r

private equity fund

r

real estate fund

r

securitized asset

Other private fund

NOTE: For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part lA.
11. Current gross asset value of the private fund:

$--50;649;4@
I

!

I

$ 56,723,885
Ownership
12. Minimum investment commitment required of an investor in the private fund:

II
II

$-G
$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:

II

II

49
50
14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

1%

I

II

15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:
0%
16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:
0%
Your Advisorv Services
Yes No
17. (a) Are you a subadviser to this private fund?

r

c;-

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17(a) is "no," leave this question blank.
No Information Filed
Yes No
18. (a) Do any other investment advisers advise the private fund?

r

c;-

(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.

1.

(a) Name of the private fund:

G=l=-SPECIAL OPPOR=R:JNmES,tIl
GT MLP FUND, LP
(b) Private fund identification number:
(include the "805-" prefix also)

I

805-9398906979

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

3.

Country:
United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity) :

Name of General Partner, Manager, Trustee, or Director
GERBER/TAYLOR MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

P'

(1) qualifies for the exclusion from the definition of investment company under section 3( c)
(1) of the Investment Company Act of 1940

r

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

Ust the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.
l_

_

_

_

_

_

_

_

_

No Information Filed

Yes No
6.

(a) Is this a "master fund" in a master-feeder arrangement?

r

r-

(b) If yes, what is the name and private fund identification number (if any) of the feeder funds
investing in this private fund?
No Information Filed

Yes No
(c) Is this a "feeder fund" in a master-feeder arrangement?

r

r-

(d) If yes, what is the name and private fund identification number (if any) of the master fund in
which this private fund invests?
Name of the Private Fund:

Private Fund Identification Number:
(include the "805-" prefix also)

NOTE: You must complete question 6 for each master-feeder arrangement regardless of whether
you are filing a single Schedule D, Section 7.B.(1). for the master-feeder arrangement or
reporting on the funds separately.
7.

If you are filing a single Schedule D, Section 7.B.(1) for a master-feeder arrangement according
to the instructions to this Section 7.B.(1), for each of the feeder funds answer the following
questions:

----- ---- -- ----- --II

I

II
I;

No Information Filed

NOTE: For purposes of questions 6 and 7, in a master-feeder arrangement, one or more funds
("feeder funds") invest all or substantially all of their assets in a single fund ("master fund"). A
fund would also be a "feeder fund" investing in a "master fund" for purposes of this question if it
issued multiple classes (or series) of shares or interests, and each class (or series) invests
substantially all of its assets in a single master fund.
Yes No

8.

(a) Is this private fund a "fund of funds"?

r. r

(b) If yes, does the private fund invest in funds managed by you or by a related person?

r r.

NOTE: For purposes of this question only, answer "yes" if the fund invests 10 percent or more of
its total assets in other pooled investment vehicles, whether or not they are also private funds, or
registered investment companies.
Yes No

9.

During your last fiscal year, did the private fund invest in securities issued by investment
companies registered under the Investment Company Act of 1940 (other than "money
market funds," to the extent provided in Instruction 6.e.)?

r

r.

10. What type of fund is the private fund?

r.

hedge fund

fund

r

r

liquidity fund

venture capital fund

r

r

private equity fund

r

real estate fund

r

securitized asset

other private fund

NOTE: For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part 1A.

11. Current gross asset value of the private fund:

+»;528 306
$ 29,716,717
Ownership

12. Minimum investment commitment required of an investor in the private fund:
$-G

$ 500,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).

13. Approximate number of the private fund's beneficial owners:

I:

44
67
14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

~I

-l4
11%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:

0%

::
I

I I

/1

Marketers
28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?
I

I

Yes

No

r

r.

I

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other solicitor, or similar person. If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

II
I

I I

I

No Information Filed

A. PRIVATE FUND
Information About the Private Fund

1.

I

(a) Name of the private fund:
GT SPECIAL OPPORTUNITIES III, LP

I

(b) Private fund identification number:
(include the "805-" prefix also)
805-1123039413

2.
I

Under the laws of what state or country is the private fund organized:
State:
Delaware

I

I
3.

Country:
United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity):
Name of General Partner, Manager, Trustee, or Director

II

II!

GERBER/TAYLOR MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

P'

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

r

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

II

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.
t

No Information Filed
Yes No

6.

(a) Is this a "master fund" in a master-feeder arrangement?

r

(b) If yes, what is the name and private fund identification number (if any) of the feeder funds
investing in this private fund?
No Information Filed

~

I

JI

Ownership
12. Minimum investment commitment required of an investor in the private fund:

I

I
I

$-G

$ 500,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).

13. Approximate number of the private fund's beneficial owners:
~

56

,
I

14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

II

'I

9

8%
15. What is the approximate percentage of the private fund benefiCially owned (in the aggregate) by
funds of funds:

0%
16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:

0%
your Advisory Services
Yes No

r

17. (a) Are you a subadviser to this private fund?

~

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17(a) is "no," leave this question blank.

j:

I

No Information Filed

Yes No

r. r

18. (a) Do any other investment advisers advise the private fund?

(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.

Name of Other Adviser to private fund
TEMPERED INVESTMENT MANAGEMENT LTD.

GK-S+RA+eGIf;

~4A~jAGeR

SEC file number
802-74717

CRD number
158837

I::IMHe9
Yes No

19. Are your clients solicited to invest in the private fund?

r

r.

20. Approximately what percentage of your clients has invested in the private fund?

0%
~vate

Offering
Yes No

21. Does the private fund rely on an exemption from registration of its securities under
Regulation D of the Securities Act of 1933?

r. r

I:

I,

MIDLAND FIXED INCOME FUND, LP
(b) Private fund identification number:
(include the "805-" prefix also)
805-3252118884

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

3.

I
I

Country:
United States

,

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity):
Name of General Partner, Manager, Trustee, or Director
GERBER/TAYLOR MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

P'

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

r

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

,,

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.
No Information Filed
Yes No

6.

r.

r

(a) Is this a "master fund" in a master-feeder arrangement?

(b) If yes, what is the name and private fund identification number (if any) of the feeder funds
investing in this private fund?
No Information Filed

-- -- -_ ..- - - - -- ------

- -- - - - - -

~

Yes No
(c) Is this a "feeder fund" in a master-feeder arrangement?

r

r.

(d) If yes, what is the name and private fund identification number (if any) of the master fund in
which this private fund invests?
Name of the Private Fund:
Private Fund Identification Number:
(include the "805-" prefix also)

I
I
I

I,
NOTE: You must complete question 6 for each master-feeder arrangement regardless of whether
you are filing a single Schedule D, Section 7.B.(1). for the master-feeder arrangement or
reporting on the funds separately.

j

j'
7.

If you are filing a single Schedule D, Section 7 .B.(l) for a master-feeder arrangement according
to the instructions to this Section 7.B.(1), for each of the feeder funds answer the following
questions:

No Information Filed

I

II

NOTE: For purposes of questions 6 and 7, in a master-feeder arrangement, one or more funds
("feeder funds") invest all or substantially all of their assets in a single fund ("master fund"). A
fund would also be a "feeder fund" investing in a "master fund" for purposes of this question if it
issued multiple classes (or series) of shares or interests, and each class (or series) invests
substantially all of its assets in a single master fund.
Yes No
8.

(a) Is this private fund a "fund of funds"?
(b) If yes, does the private fund invest in funds managed by you or by a related person?

r. r
r r.

NOTE: For purposes of this question only, answer "yes" if the fund invests 10 percent or more of
its total assets in other pooled investment vehicles, whether or not they are also private funds, or
registered investment companies.
Yes No
9.

I :,

During your last fiscal year, did the private fund invest in securities issued by investment
companies registered under the Investment Company Act of 1940 (other than "money
market funds," to the extent provided in Instruction 6.e.)?

r. r

I,

10. What type of fund is the private fund?

r.

hedge fund

fund

r

r

liquidity fund

venture capital fund

r

r

private equity fund

r

real estate fund

r

securitized asset

Other private fund

NOTE: For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part 1A.

11. Current gross asset value of the private fund:

II

$--39;447;&+1-

$ 27,578,161
Ownership
12. Minimum investment commitment required of an investor in the private fund:
$-G
$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).

13. Approximate number of the private fund's beneficial owners:
;.t

45
14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:
g

16%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:
0%

NOTE: For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part 1A.
11. Current gross asset value of the private fund:
~GO,909,15q

1/

$ 76,224,842
Ownership

12. Minimum investment commitment required of an investor in the private fund:
~

$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:
~

56
14. What is the apprOXimate percentage of the private fund beneficially owned by you and your
related persons:

i

II

0%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:

0%
16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:
I

I

I
I

0%
Your Advisory SeDlke5.
Yes No

r r.-

17. (a) Are you a subadviser to this private fund?

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17(a) is "no," leave this question blank.
No Information Filed
Yes No

r

18. (a) Do any other investment advisers advise the private fund?

r.-

(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.
No Information Filed

I

---------- -- -- - --- ..- -: I

I'

Yes No

19. Are your clients solicited to invest in the private fund?
20. Approximately what percentage of your clients has invested in the private fund?

0%

/1
Private Offering

r

r.-

I

I

I

I

27. During your last fiscal year, what percentage of the private fund's assets (by value) was valued
by a person, such as an administrator, that is not your related person?
0%
Include only those assets where (i) such person carried out the valuation procedure established
for that asset, if any, including obtaining any relevant quotes, and (ii) the valuation used for
purposes of investor subscriptions, redemptions or distributions, and fee calculations (including
allocations) was the valuation determined by such person.

I:
I

I

Marketers

28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?

Yes

No

r

r.

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other solicitor, or similar person. If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

No Information Filed
•.

---A. PRIVATE FUND
Information About the Prillate Fund

1.

(a) Name of the private fund:
MIDLAND INTERNATIONAL EQUITY FUND, L.P.
(b) Private fund identification number:
(include the "805-" prefix also)
805-1940738930

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

II
3.

II

Country:
United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity) :

I

i.

Name of General Partner, Manager, Trustee, or Director

GERBER/TAYLOR MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

17

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

r

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

II

II
I

I
I

I

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.
I

I

NOTE: For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part 1A.
11. Current gross asset value of the private fund:
~60,909,15q

$ 76,224,842
Ownership

12. Minimum investment commitment required of an investor in the private fund:
~

$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:

,I

~

56

II

14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

0%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:

0%

II

I

16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:

0%
your Advisorv

Sentkea
Yes No

r

17. (a) Are you a subadviser to this private fund?

r.-

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17(a) is "no," leave this question blank.
L... __________________ _

No Information Filed
Yes No

r.-

r

18. (a) Do any other investment advisers advise the private fund?

(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.

--_._------ _. _

...-

L _____ _

No Information Filed

-;.

Yes No

19. Are your clients soliCited to invest in the private fund?

20. Approximately what percentage of your clients has invested in the private fund?

0%
Private Offering

r

r.

I:

Does the private fund use the services of someone other than you or your
employees for marketing purposes?

I

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other solicitor, or similar person. If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

I'
I

No Information Filed

A. PRIVATE FUND
Information About the Private Fund

1.

(a) Name of the private fund:
MIDLAND US FUND, L.P.
(b) Private fund identification number:
(include the "805-" prefix also)
805-6909007902

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

I I

It
3.

Country:
United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity):
Name of General Partner, Manager, Trustee, or Director

GERBER/TAYLOR MANAGEMENT COMPANY

,,
4.

The private fund (check all that apply; you must check at least one):

P'

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

r

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.

II

No Information Filed
Yes No

6.

(a) Is this a "master fund" in a master-feeder arrangement?

r

r.

(b) If yes, what is the name and private fund identification number (if any) of the feeder funds
investing in this private fund?
r
I
No Information Filed
l _
Yes No

(c) Is this a "feeder fund" in a master-feeder arrangement?
(d)

$-G

$ 1,000,000
NOTE : Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:

II

48

50
14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

4
5%

Ii

I

II

15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:

0%
16. What is the approximate percentage of the private fund beneficially owned by non -United States
persons:

0%
Your Advisgrv Services
Yes No

17. (a) Are you a subadviser to this private fund?

r

r-

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17(a) is "no," leave this question blank.
No Information Filed
Yes No

18. (a) Do any other investment advisers advise the private fund?

r

r-

(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.
No Information Filed
Yes No

19. Are your clients solicited to invest in the private fund?

r

r-

20. Approximately what percentage of your clients has invested in the private fund?

0%

II
Private Offering
Yes No

21. Does the private fund rely on an exemption from registration of its securities under
Regulation D of the Securities Act of 1933?
I I

22 . If yes, provide the private fund's Form D file number (if any):

I

Form D file number

r- r

II

I

purposes of investor subscriptions, redemptions or distributions, and fee calculations (including
allocations) was the valuation determined by such person.

I I

28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?

Ii

Yes

No

r

r.

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other solicitor, or similar person. If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

-- -

-------- - - - - - - -

No Information Filed

II

A. PRIVATE FUND

Information About the Prillate Fund
1.

(a) Name of the private fund:
MIDLAND US QP FUND, LP
(b) Private fund identification number:
(include the "805-" prefix also)
805-9191611341

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

3.

Country:
United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity):

I

Name of General Partner, Manager, Trustee, or Director

I

GERBER/TAYLOR MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

r

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

P'

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

List the name and country, in English, of each foreign finanCial regulatory authority with which
the private fund is registered.

II

No Information Filed

Yes No
6.

(a) Is this a "master fund" in a master-feeder arrangement?

r. r
I

(b) If yes, what is the name and private fund identification number (if any) of the feeder funds
investing in this private fund?

Private Fund Name

I

Private Fund Identification Number

II

I

I

I

Ownership
I

I

12. Minimum investment commitment required of an investor in the private fund:

I,

$-G
$ 1,000,000

I

NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:

+6

I

84

I

14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

I

I

~

,I

4%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:

I

I

41
36%
16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:

9
3%

I:

your Adyisory Services
Yes No

17. (a) Are you a subadviser to this private fund?

('"

r-

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17(a) is "no," leave this question blank.

I

No Information Filed
Yes No

Ie

18. (a) Do any other investment advisers advise the private fund?

('"

(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.
Name of Other Adviser to private fund

SEC file number

CRD number

AVENIR CORPORATION

801-32509

110545

FIDUCIARY MANAGEMENT, INC.

801-15164

109149

MAKAIRA PARTNERS, LLC

801-73728

153729

ROUNDROCK CAPITAL PARTNERS, L.P.

117615
Yes No

19. Are your clients solicited to invest in the private fund?
20. Approximately what percentage of your clients has invested in the private fund?

II

, I

3%

r- ('"

EXHIBITF

FORM ADV
UNIFORM APPLICATION FOR INVESTMENT ADVISER REGISTRATION AND REPORT
BY EXEMPT REPORTING ADVISERS
Primary Business Name: GERBER/TAYLOR MANAGEMENT

CRD Number: 109319

COMPANY
Annual Amendment - All Sections

Rev. 10/2012

3/31/20144:00:07 PM
WARNING: Complete this form truthfully. False statements or omissions may result in denial of your
application, revocation of your registration, or criminal prosecution. You must keep this form
updated by filing periodic amendments. See Form ADV General Instruction 4.
Item 1 Identifying Information

Responses to this Item tell us who you are, where you are doing business, and how we can contact you.
A.

Your full legal name (if you are a sole proprietor, your last, first, and middle names):
GERBER/TAYLOR MANAGEMENT COMPANY

B.

Name under which you primarily conduct your advisory business, if different from Item 1.A.:
GERBER/TAYLOR MANAGEMENT COMPANY

List on Section 1.B. of Schedule 0 any additional names under which you conduct your advisory
business.
C.

If this filing is reporting a change in your legal name (Item 1.A.) or primary business name (Item
1.B.), enter the new name and specify whether the name change is of
your legal name or
your primary business name:

r
D.

r

(1) If you are registered with the SEC as an investment adviser, your SEC file number: 801-56698
(2) If you report to the SEC as an exempt reporting adviser, your SEC file number:

E.

If you have a number ("CRO Number") assigned by the FINRA's CRO system or by the lARD system,
your CRO number: 109319

If your firm does not have a CRO number, skip this Item 1. E. Do not provide the CRO number of one
of your officers, employees, or affiliates.

F.

Principal Office and Place of Business
(1) Address (do not use a P.O. Box):
Number and Street 1:
ONE COMMERCE SQUARE
State:
City:
MEMPHIS
Tennessee

Number and Street 2:
SUITE 1900
Country:
ZIP+4/Postal Code:
United States
38103

If this address is a private reSidence, check this box:

n

List on Section 1.F. of Schedule 0 any office, other than your principal office and place of
business, at which you conduct investment advisory business. If you are applying for
registration, or are registered, with one or more state securities authorities, you must list all of
your offices in the state or states to which you are applying for registration or with whom you
are registered. If you are applying for SEC registration, if you are registered only with the SEC,

No Information Filed

:.

~~-::........::...~:.....,

I

A. PRIVATE FUND

Information About the Private Fund
1.

II

(a) Name of the private fund:
GT EMERGING MARKETS, L.P.
(b) Private fund identification number:
(include the "805-" prefix also)
805-5550106334

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

3.

Country:
United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity) :

Name of General Partner, Manager, Trustee, or Director
GERBER/TAYLOR MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

P'

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

r

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.

- ---1

No Information Filed

L.

Yes No
6.

(a) Is this a "master fund" in a

master~feeder

r

arrangement?

r-

(b) If yes, what is the name and private fund identification number (if any) of the feeder funds
investing in this private fund?

L_

No Information Filed

----------

I

JI
Yes No

(c) Is this a "feeder fund" in a master-feeder arrangement?

r- r-

(d) If yes, what is the name and private fund identification number (if any) of the master fund in
which this private fund invests?
Name of the Private Fund:
GT EMERGING MARKETS (QP), L.P.
Private Fund Identification Number:
(include the "805-" prefix also)
805-1535502417

NOTE: You must complete question 6 for each master-feeder arrangement regardless of whether
you are filing a single Schedule D, Section 7.B.(1). for the master-feeder arrangement or
reporting on the funds separately.
7.

If you are filing a single Schedule D, Section 7.B.(1) for a master-feeder arrangement according
to the instructions to this Section 7 .B.( 1), for each of the feeder funds answer the following
questions:

------Ill

No Information Filed

NOTE: For purposes of questions 6 and 7, in a master-feeder arrangement, one or more funds
("feeder funds") invest all or substantially all of their assets in a single fund ("master fund"). A
fund would also be a "feeder fund" investing in a "master fund" for purposes of this question if it
issued multiple classes (or series) of shares or interests, and each class (or series) invests
substantially all of its assets in a single master fund.

!i

Yes No
8.

(a) Is this private fund a "fund of funds"?
(b) If yes, does the private fund invest in funds managed by you or by a related person?

r. r
r. r

NOTE: For purposes of this question only, answer "yes" if the fund invests 10 percent or more of
its total assets in other pooled investment vehicles, whether or not they are also private funds, or
registered investment companies.

Yes No
9.

During your last fiscal year, did the private fund invest in securities issued by investment
companies registered under the Investment Company Act of 1940 (other than "money
market funds," to the extent provided in Instruction 6.e.)?

r

r.

10. What type of fund is the private fund?
~ hedge fund

fund

r

r

liquidity fund

venture capital fund

r

r

private equity fund

r

real estate fund

r

securitized asset

Other private fund

NOTE: For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part lA.
11. Current gross asset value of the private fund:

Ii

$--5e,:n3;88-5
$ 100,195,852
Ownership
12. Minimum investment commitment required of an investor in the private fund:

$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:

.;e

II

54

t

,,

City :
MEMPHIS

State:
Tennessee

Country:
United States

I

Yes No

(e) Is the custodian a related person of your firm?

I,

r

1II L (f) If the custodian is a broker-dealer, provide its SEC registration number_(_if_a_n_y_)___.Jil'l
U

CRD Number (if any):

]

Administrator

26. (a) Does the private fund use an administrator other than your firm?

Yes

No

r

e;-

If the answer to 26(a) is "yes," respond to questions (b) through (f) below. If the private
fund uses more than one administrator, you must complete questions (b) through (f)
separately for each administrator.

No Information Filed

I

I

I

27. During your last fiscal year, what percentage of the private fund's assets (by value) was valued
by a person, such as an administrator, that is not your related person?

0%
Include only those assets where (i) such person carried out the valuation procedure established
for that asset, if any, including obtaining any relevant quotes, and (ii) the valuation used for
purposes of investor subscriptions, redemptions or distributions, and fee calculations (including
allocations) was the valuation determined by such person .

I
,

I

Marketers
Yes

28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?

r

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other solicitor, or similar person. If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

No Information Filed

A. PRIVATE FUND

---- ----- - --

Information About the Private Fund
1.

(a) Name of the private fund :
GT MLP FUND, LP

II

(b)

No

I

NOTE: For purposes of questions 6 and 7, in a master-feeder arrangement, one or more funds
("feeder funds") invest all or substantially all of their assets in a single fund ("master fund"). A
fund would also be a "feeder fund" investing in a "master fund" for purposes of this question if it
issued multiple classes (or series) of shares or interests, and each class (or series) invests
substantially all of its assets in a single master fund .
Yes No
8.

(a) Is this private fund a "fund of funds"?
(b) If yes, does the private fund invest in funds managed by you or by a related person?

r. r
r r.

NOTE: For purposes of this question only, answer "yes" if the fund invests 10 percent or more of
its total assets in other pooled investment vehicles, whether or not they are also private funds, or
registered investment companies.
Yes No
9.

During your last fiscal year, did the private fund invest in securities issued by investment
companies registered under the Investment Company Act of 1940 (other than "money
market funds," to the extent provided in Instruction 6.e.)?

r

r.

10. What type of fund is the private fund?

r.

hedge fund

fund

r

r

liquidity fund

venture capital fund

r

r

private equity fund

r

real estate fund

r

securitized asset

other private fund

NOTE: For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part 1A.
11. Current gross asset value of the private fund:
!jr~~.

$ 39,075,144
Ownership
12. Minimum investment commitment required of an investor in the private fund:

$ 500,000

iI
I

NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's benefiCial owners:

II

6+
86
14. What is the approximate percentage of the private fund beneficially owned by you and your

II'I

related persons:

H8%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:

II

0%
16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:

0%
Include only those assets where ( i) such person carried out the valuation procedure established
for that asset, if any, including obtaining any relevant quotes, and (ii) the valuation used for
purposes of investor subscriptions, redemptions or distributions, and fee calculations (including
allocations) was the valuation determined by such person.

Marketers
28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?

Yes

No

r

r.

You must answer "yes" whether the person acts as a placement agent, consu ltant, finder,
introducer, municipal advisor or other soliCitor, or similar person. If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

I

I

; II

No Information Filed

II

... I

:I

------------------------------~==========================================-~
_I

A. PRIVATE FUND

Information About the Private Fund
1.

(a) Name of the private fund:
GT SPECIAL OPPORTUNITIES III, LP
(b) Private fund identification number:
(include the "805-" prefix also)
805-1123039413

2.

Under the laws of what state or country is the private fund organized:

:I
3.

,I

Country:

Delaware

United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity):

Name of General Partner, Manager, Trustee, or Director

I

I
I

State:

GERBER/TAYLOR MANAGEMENT COMPANY

I

I
4.

The private fund (check all that apply; you must check at least one):

P'

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

r

(2) qualifies for the exclusion from the definition of investment company under section 3(c)

(7) of the Investment Company Act of 1940
5.

I!

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.
No Information Filed

Yes No
6.

(a) Is this a "master fund" in a master-feeder arrangement?

r

r.J

11. Current gross asset value of the private fund:

$ 41,993,666
$ 73,347,278
Ownership

12. Minimum investment commitment required of an investor in the private fund:

$ 500,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:

56
91
14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

8
6%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:

0%
16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:

0%
ygur AdYisgry Serylces

Yes No

r

17. (a) Are you a subadviser to this private fund?

r-

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17( a) is "no," leave this question blank.
No Information Filed
Yes No

r-

18. (a) Do any other investment advisers advise the private fund?

r

(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.
Name of Other Adviser to private fund

TEMPERED INVESTMENT MANAGEMENT LTD.

SEC file number

802-74717

CRD number

158837
Yes No

19. Are your clients solicited to invest in the private fund?

I,

r

r-

20. Approximately what percentage of your clients has invested in the private fund?

0%
Private Offering
Yes No

21.

r-

r

Include only those assets where (i) such person carried out the valuation procedure established
for that asset, if any, including obtaining any relevant quotes, and (ii) the valuation used for
purposes of investor subscriptions, redemptions or distributions, and fee calculations (including
allocations) was the valuation determined by such person.

Marketers
Yes

No

28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?

t
t
t

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other soliCitor, or similar person. If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

I
I
I

iI

A. PRIVATE FUND

-- - ----- -------------------

Information About the Private Fund
1.

(a) Name of the private fund:
MIDLAND FIXED INCOME FUND, LP
(b) Private fund identification number:
(include the "80S-" prefix also)
805-3252118884

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

II
3.

Country:
United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity):

Name of General Partner, Manager, Trustee, or Director
GERBER/TAYLOR MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

P'

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

r

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.
No Information Filed

Yes No
6.

(a) Is this a "master fund" in a master-feeder arrangement?
(b)

(e'

I

I

11. Current gross asset value of the private fund:
~,578,161

$ 18,803,347
Ownership

12. Minimum investment commitment required of an investor in the private fund:

$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:

:I

43
14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

-Hi
18%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:
0%
16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:
0%
your Advisory Services
Yes No

r r.

17. (a) Are you a subadviser to this private fund?

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17(a) is "no," leave this question blank.
No Information Filed
Yes No

18. (a) Do any other investment advisers advise the private fund?
(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.
Name of Other Adviser to private fund

CORBYN INVESTMENT MANAGEMENT INC

SEC file number

801-9139

CRD number

104716
Yes No

19. Are your clients solicited to invest in the private fund?

r

r.

20. Approximately what percentage of your clients has invested in the private fund?
0%
Private Offering
Yes No

21.

r.

r

purposes of investor subscriptions, redemptions or distributions, and fee calcu lations (including
allocations) was the valuation determined by such person.

Marketers
Yes
28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?

No

r

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other solicitor, or similar person . If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

No Information Filed

1

A. PRIVATE FUND

Information About the Private Fund

1.

(a) Name of the private fund :
MIDLAND INTERNATIONAL EQUITY FUND, L.P.
(b) Private fund identification number:
(include the "80S-" prefix also)
80S-1940738930

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

3.

Country:
United States

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity):

:I

Name of General Partner, Manager, Trustee, or Director
GERBER/TAYLOR MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

P'

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

r

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

S.

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.
No Information Filed

II

Yes No
6.

(a) Is this a "master fund" in a master-feeder arrangement?

r r.

(b) If yes, what is the name and private fund identification number (if any) of the feeder funds
investing in this private fund?
No Information Filed

Ownership
12. Minimum investment commitment required of an investor in the private fund:

$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).
13. Approximate number of the private fund's beneficial owners:
~

I

58

I
I

14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons:

I

II

0%

I

15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:

0%

!I

I

16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:

0%
your AdYisory Seryjces

Yes No
17. (a) Are you a subadviser to this private fund?

r

r.

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17( a) is "no," leave this question blank.
L

____ _

No Information Filed
Yes No

18. (a) Do any other investment advisers advise the private fund?

r

r.

(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.
No Information Filed
Yes No
19. Are your clients solicited to invest in the private fund?

r

r.

20. Approximately what percentage of your clients has invested in the private fund?

0%
Private Offering
Yes No
21. Does the private fund rely on an exemption from registration of its securities under
Regulation D of the Securities Act of 1933?
22. If yes, provide the private fund's Form D file number (if any):

I

Form D file number

r. r

CRD Number (if any):
~

Administrator

26. (a) Does the private fund use an administrator other than your firm?

Yes

No

r

r.

If the answer to 26(a) is "yes," respond to questions (b) through (f) below. If the private
fund uses more than one administrator, you must complete questions (b) through (f)
separately for each administrator.

No Information Filed

,I

---------l

27. During your last fiscal year, what percentage of the private fund's assets (by value) was valued
by a person, such as an administrator, that is not your related person?

,

0%
Include only those assets where (i) such person carried out the valuation procedure established
for that asset, if any, including obtaining any relevant quotes, and (ii) the valuation used for
purposes of investor subscriptions, redemptions or distributions, and fee calculations (including
allocations) was the valuation determined by such person.

I;

Marketers

Yes
28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?

No

r

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other solicitor, or similar person. If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

No Information Filed

A. PRIVATE FUND

II

Information About the Private Fund

1.

(a) Name of the private fund:
MIDLAND US FUND, L.P.
(b) Private fund identification number:
(include the "805-" prefix also)
805-6909007902

J

issued multiple classes (or series) of shares or interests, and each class (or series) invests
substantially all of its assets in a single master fund.

II

Yes No
8.

(a) Is this private fund a "fund of funds"?
(b) If yes, does the private fund invest in funds managed by you or by a related person?

r. r
r. r

NOTE: For purposes of this question only, answer "yes" if the fund invests 10 percent or more of

its total assets in other pooled investment vehicles, whether or not they are also private funds, or
registered investment companies.

Yes No

9.

II

During your last fiscal year, did the private fund invest in securities issued by investment
companies registered under the Investment Company Act of 1940 (other than "money
market funds," to the extent provided in Instruction 6.e.)?

r

r.

10. What type of fund is the private fund?

r.:

hedge fund

fund

r

r

liquidity fund

venture capital fund

r

r

private equity fund

r

real estate fund

r

securitized asset

Other private fund

NOTE: For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part lA.

11. Current gross asset value of the private fund:
$-.ft5.3il-3;969

II
I

$ 76,788,867

I

,I

Ownership
12. Minimum investment commitment required of an investor in the private fund:

II

II

$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).

13. Approximate number of the private fund's beneficial owners:

;.g

II

52
14. What is the approximate percentage of the private fund beneficially owned by you and your

related persons:

II
II

II

~

4%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:
0%
16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:
0%

Your Advisory Services
Yes No

II

EXHIBITG

FORM ADV
UNIFORM APPLICATION FOR INVESTMENT ADVISER REGISTRATION AND REPORT BY EXEMPT REPORTING ADVISERS
Primary Business Name: TSW II CAPITAL ADVISORS, LLC

CRD Number: 157380

Annual Amendment - All Sections

Rev. 10/2012

3/10/2015 5:32:03 PM
WARNING: Complete this form truthfully. False statements or omissions may result in denial of your application, revocation of your registration, or crimina l
prosecution. You must keep this form updated by filing periodic amendments. See Form ADV General Instruction 4.

Item 1 Identifying Information

l

Responses to this Item tell us who you are, where you are doing business, and how we can contact you.
A.

--------------------------------------------------------------------------------------------------

Your full legal name (if you are a sole proprietor, your last, first, and middle names):

TSW II CAPITAL ADVISORS, LLC
B.

Name under which you primarily conduct your advisory business, if different from Item LA.:

TSW II CAPITAL ADVISORS, LLC
List on Section 1.B. of Schedule D any additional names under which you conduct your advisory business.

C.

If this filing is reporting a change in your legal name (Item LA.) or primary business name (Item LB.), enter the new name and specify whether the
name change is of
your legal name or IJ your primary business name:

n
D.

(1) If you are registered with the SEC as an investment adViser, your SEC file number: 801-73369
(2) If you report to the SEC as an exempt reporting adviser, your SEC file number:

E.

If you have a number ("CRD Number") assigned by the FINRA's CRD system or by the lARD system, your CRD number: 157380
If your firm does not have a CRD number, skip this Item 1. E. Do not provide the CRD number of one of your officers, employees, or affiliates.

F.

Principal Office and Place of Business
(1) Address (do not use a P.O. Box):
Number and Street 1:
736 MARKET STREET
City:
CHATTANOOGA

Number and Street 2:
SUITE 1400
Country:
UNITED STATES

State:
Tennessee

If this address is a private reSidence, check this box:

ZIP+4/Postal Code:
37402

ri

List on Section 1.F. of Schedule D any office, other than your principal office and place of bUSiness, at which you conduct investment advisory business. If
you are applying for registration, or are registered, with one or more state securities authorities, you must list all of your offices in the state or states to
which you are applying for registration or with whom you are registered. If you are applying for SEC registration, if you are registered only with the SEC, or
if you are reporting to the SEC as an exempt reporting adviser, list the largest five offices in terms of numbers of employees.
(2) Days of week that you normally conduct business at your principal office and place of bUSiness:
C! Monday - Friday other:

r:

Normal business hours at this location:
9:00 AM - 5:00 PM
(3) Telephone number at this location:
423-267-1430
(4) Facsimile number at this location:
423-267-5509
G.

Mailing address, if different from your principal office and place of business address:
Number and Street 2:

Number and Street 1:
City:

If this address is a private reSidence, check this box:

I

H.

Country:

State:

ZIP+4/Postal Code:

r

If you are a sole proprietor, state your full residence address, if different from your principal office and place of business address in Item 1.F.:

Number and Street 1:

Number and Street 2:

City:

Country:

State:

ZIP+4/Postal Code:

Yes No
1.

Do you have one or more websites?

r

jo'

Additional Custodian Information: 1 Record(s) Filed.

If the answer to 25(a) is "yes." respond to questions (b) through (f) below for each custodian the private fund uses. If the private fund uses
more than one custodian, you must complete questions (b) through (f) separately for each custodian.

(b) Legal name of custodian:
FIRST TENNESSEE BANK, N.A.

(c) Primary business name of custodian:
FIRST TENNESSEE BANK, N.A.

(d) The location of the custodian's office responsible for custody of the private fund's assets (city, state and country):
City:
CHATTANOOGA

State:
Tennessee

Country:
UNITED STATES
Yes No

(e) Is the custodian a related person of your firm?

(f)

If the custodian is a broker-dealer, provide its SEC registration number (if any)

CRD Number (if any):

Administrator
Yes No
26. (a) Does the private fund use an administrator other than your firm?
If the answer to 26(a) is "yes." respond to questions (b) through (f) below. If the private fund uses more than one administrator, you must
complete questions (b) through (f) separately for each administrator.

No Information Filed

27. During your last fiscal year, what percentage of the private fund's assets (by value) was valued by a person, such as an administrator, that is not
your related person?

0%
Include only those assets where (i) such person carried out the valuation procedure established for that asset, if any, including obtaining any
relevant quotes, and (ii) the valuation used for purposes of investor subscriptions, redemptions or distributions, and fee calculations (including
allocations) was the valuation determined by such person.

Marketers
Yes No
28. (a) Does the private fund use the services of someone other than you or your employees for marketing purposes?
You must answer "yes" whether the person acts as a placement agent, consultant, finder, introducer, municipal advisor or other solicitor, or
similar person. If the answer to 28(a) is "yes", respond to questions (b) through (g) below for each such marketer the private fund uses. If the
private fund uses more than one marketer you must complete questions (b) through (g) separately for each marketer.

No Information Filed

A. PRIVATE FUND

Information About the Private Fund

1.

(a) Name of the private fund:
TSWII, L.P.
(b) Private fund identification number:
(include the "805-" prefix also)
805-5418060792

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

3.

Country:
UNITED STATES

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving In a similar capacity):

N,a me of General

~r:trn.!'" M~n"ager,

Trustee, or DlrectQr

TSWII MANAGEMENT COMPANY

4.

5.

The private fund (check all that apply; you must check at least one):

o

(1) qualifies for the exclusion from the definition of investment company under section 3(c)(1) of the Investment Company Act of 1940

~

(2) qualifies for the exclusion from the definition of investment company under section 3(c)(7) of the Investment Company Act of 1940

List the name and country, in English, of each foreign financial regulatory authority with which the private fund is registered.
No Information Filed

Yes No
6.

(a) Is this a "master fund" in a master-feeder arrangement?

C!:.

0

(b) If yes, what is the name and private fund identification number (if any) of th e feeder funds investing in this private fund?
P.rlva~

F.und Name

Private Feund Identification Number

TSWII DOMESTIC, L.P.

805-4691364140

TSWII OFFSHORE, SPC

805-5032074766

Yes No
(c) Is this a "feeder fund" in a master-feeder arrangement?
(d) If yes, what is the name and private fund identification number (if any) of the master fund in which this private fund invests?
Name of the Private Fund:
Private Fund Identification Number:
(include the "805-" prefix also)

NOTE: You must complete question 6 for each master-feeder arrangement regardless of whether you are filing a single Schedule D, Section 7.6.(1) .
for the master-feeder arrangement or reporting on the funds separately.
7.

If you are filing a single Schedule D, Section 7.6.(1) for a master-feeder arrangement according to the instructions to this Section 7.6.(1), for each of
the feeder funds answer the following questions:

No Information Flied

NOTE: For purposes of questions 6 and 7, in a master-feeder arrangement, one or more funds ("feeder funds") invest all or substantially all of their
assets in a single fund ("master fund"). A fund would also be a "feeder fund" investing in a "master fund" for purposes of this question if it issued
multiple classes (or series) of shares or interests, and each class (or series) invests substantially all of its assets in a single master fund.

Yes No
8.

(a) Is this private fund a "fund of funds"?
(b) If yes, does the private fund invest in funds managed by you or by a related person?
NOTE: For purposes of this question only, answer "yes" if the fund invests 10 percent or more of its total assets in other pooled investment
vehicles, whether or not they are also private funds, or registered Investment companies.

Yes No
9.

During your last fiscal year, did the private fund invest in securities issued by investment companies registered under the Investment
Company Act of 1940 (other than "money market funds, " to the extent provided in Instruction 6.e.)?

o

10. What type of fund is the private fund?

C!:. hedge fund 0 liquidity fund 0 private equity fund 0 real estate fund 0 securitized asset fund 0 venture capital fund 0 Other private fund
NOTE : For funds of funds, refer to the funds in which the private fund invests. For definitions of these fund types, please see Instruction 6 of the
Instructions to Part 1A.
11. Current gross asset value of the private fund:

$ 371,000,000

C!:'

Ownership

12. Minimum investment commitment required of an investor in the private fund:

$ 1,000,000
NOTE: Report the amount routinely required of investors who are not your related persons (even if different from the amount set forth in the
organizational documents of the fund).

13. Approximate number of the private fund's beneficial owners:
98

14. What is the approximate percentage of the private fund beneficially owned by you and your related persons:
8%

15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by funds of funds:
14%

16. What is the approximate percentage of the private fund beneficially owned by non-United States persons:
11%

Your Advisory Services
Yes No

0

17. (a) Are you a subadviser to this private fund?

(!:.

(b) If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the adviser of the private fund. If the answer to
question 17(a) is "no," leave this question blank.
No Information Filed
Yes No

0

18. (a) Do any other investment advisers advise the private fund?

(!:.

(b) If the answer to question 18(a) is "yes," provide the name and SEC file number, if any, of the other advisers to the private fund. If the answer
to question 18(a) is "no," leave this question blank.
No Information Filed
Yes No

o

19. Are your clients solicited to invest in the private fund?

(!:.

20. Approximately what percentage of your clients has invested in the private fund?
0%
Private Offering
Yes No
21. Does the private fund rely on an exemption from registration of its securities under Regulation D of the Securities Act of 1933?

22. If yes, provide the private fund's Form D file number (if any):

IForm D file number
021-173026

B. SERVICE PROVIDERS

Auditors
Yes No
23. (a) (1) Are the private fund's financial statements subject to an annual audit?
(2) Are the financial statements prepared in accordance with U.S. GAAP?
If the answer to 23(a)(1) is "yes," respond to questions (b) through (f) below. If the private fund uses more than one auditing firm, you must
complete questions (b) through (f) separately for each auditing firm.
Additional Auditor Information: 1 Record(s} Filed.
If the answer to 23(a)(1) is "yes," respond to questions (b) through (f) below. If the private fund uses more than one auditing firm, you
must complete questions (b) through (f) separately for each auditing firm.

(b) Name of the auditing firm:
ELLIOTT DAVIS DECOSIMO, LLC

EXHIBITH

TSWll

INVESTMENTS IN ABSOLUTE RETURN STRATEGIES

May 6,2015
Senator Robert P. Corker, Jr.
P. O. Box 886
Chattanooga, TN 37401
Ro: 1'SWII, L.P. Account NTC & Co. FEO Robert P. Corker, ,Tr. (IRA)
Dear Bob,
You have l'equcsted certain clarifications from us concerning TSWII, L.P. to aid you m
filing n United States Senate Financial Disclosure Report with the Select Committee on
Ethics.
We hereby verify that:

1. TSWIl, L.P. has more than 100 participants or investors.
2. TSWII, L.P. is widely diversified in that it holds no more than 5% of the value of its
portfolio in anyone issuer other than the U. S. Government and no more than 20%
of any particular geographic or economic sector.
3. The investment is held under circumstances such that Robert P. Corker, Jr. can
neither exercise control 01' have the ability to exercise control over the financial
interest held by 1'SWII. L.P.

L.B.
President of TSWII Management Company
(GeneL'a! Partner of TSWII. LP)

TSWlI

M,\P;.'CHME~" CmU'ANY

736 M.\HKET STllI'.ET - Sl;JTI' 14{)() • CII.\1TJI~~I()(:O\. T£."ti!ss~.t: 3j-'W:!·41l15

(423) 267·1430 •

(~,\X)

267-!i509

EXHIBIT I

FORM ADV
UNIFORM APPLICATION FOR INVESTMENT ADVISER REGISTRATION AND REPORT
BY EXEMPT REPORTING ADVISERS
Primary Business Name: TSW II CAPITAL ADVISORS, LLC

CRD Number: 157380
Rev. 10/2012

Annual Amendment - All Sections

3/17/20142:08:42 PM
WARNING: Complete this form truthfully. False statements or omissions may result in denial of your
application, revocation of your registration, or criminal prosecution. You must keep this form
updated by filing periodic amendments. See Form ADV General Instruction 4.
Item 1 Identifying Information

Responses to this Item tell us who you are, where you are doing business, and how we can contact you.
A.

Your full legal name (if you are a sole proprietor, your last, first, and middle names):
TSW II CAPITAL ADVISORS, LLC

B.

Name under which you pri marily conduct your advisory business, if different from Item LA.:
TSW II CAPITAL ADVISORS, LLC

List on Section 1.B. of Schedule 0 any additional names under which you conduct your advisory
business.
C.

If this filing is reporting a change in your legal name (Item LA.) or primary business name (Item
LB.), enter the new name and specify whether the name change is of
your legal name or
your primary business name:

r
D.

r

(1) If you are registered with the SEC as an investment adviser, your SEC file number: 801-73369

(2) If you report to the SEC as an exempt reporting adviser, your SEC file number:
E.

If you have a number ("CRO Number") assigned by the FINRA's CRO system or by the lARD system,
your CRO number: 157380

If your firm does not have a CRO number, skip this Item 1.E. Do not provide the CRO number of one
of your officers, employees, or affiliates.

F.

Principal Office and Place of Business
(1) Address (do not use a P.O. Box):
Number and Street 1:
736 MARKET STREET
City:
State:
Tennessee
CHATTANOOGA

Number and Street 2:
SUITE 1400
Country:
ZIP+4/Postal Code:
United States
37402

If this address is a private reSidence, check this box:

r.

List on Section 1.F. of Schedule 0 any office, other than your principal office and place of
bUSiness, at which you conduct investment advisory business. If you are applying for
registration, or are registered, with one or more state securities authorities, you must fist all of
your offices in the state or states to which you are applying for registration or with whom you
are registered. If you are applying for SEC registration, if you are registered only with the SEC,
or if you are reporting to the SEC as an exempt reporting adviser, fist the largest five offices in

lL

CRD Number (if any):

, I

Administrator

26. (a) Does the private fund use an administrator other than your firm?

Ves

No

r

r.

If the answer to 26(a) is "yes," respond to questions (b) through (f) below. If the private
fund uses more than one administrator, you must complete questions (b) through (f)
separately for each administrator.

No Information Filed

I
I

II
27. During your last fiscal year, what percentage of the private fund's assets (by value) was valued
by a person, such as an administrator, that is not your related person?

0%
Include only those assets where (i) such person carried out the valuation procedure established
for that asset, if any, including obtaining any relevant quotes, and (ii) the valuation used for
purposes of investor subscriptions, redemptions or distributions, and fee calculations (including
allocations) was the valuation determined by such person.
Marketers

28. (a) Does the private fund use the services of someone other than you or your
employees for marketing purposes?

Ves

No

r

r.

You must answer "yes" whether the person acts as a placement agent, consultant, finder,
introducer, municipal advisor or other solicitor, or similar person. If the answer to 28(a) is
"yes", respond to questions (b) through (g) below for each such marketer the private fund
uses. If the private fund uses more than one marketer you must complete questions (b)
through (g) separately for each marketer.

No Information Filed

I

-------- - _ J

I.

A. PRIVATE FUND
Information,About the Private Fund

1.

(a) Name of the private fund:
TSWII, L.P.

II

(b) Private fund identification number:
(include the "805-" prefix also)
805-5418060792

2.

Under the laws of what state or country is the private fund organized:
State:
Delaware

Country:
United States

3.

Name(s) of General Partner, Manager, Trustee, or Directors (or persons serving in a similar
capacity) :

Name of General Partner, Manager, Trustee, or Director
TSWII MANAGEMENT COMPANY

4.

The private fund (check all that apply; you must check at least one):

r

(1) qualifies for the exclusion from the definition of investment company under section 3(c)
(1) of the Investment Company Act of 1940

P

(2) qualifies for the exclusion from the definition of investment company under section 3(c)
(7) of the Investment Company Act of 1940

5.

List the name and country, in English, of each foreign financial regulatory authority with which
the private fund is registered.
No Information Filed

Yes No
6.

r. r

(a) Is this a "master fund" in a master-feeder arrangement?

(b) If yes, what is the name and private fund identification number (if any) of the feeder funds
investing in this private fund?

I!
I

Private Fund Identification Number

Private Fund Name

II

I

TSWII DOMESTIC, L.P.

805-4691364140

TSWII OFFSHORE, SPC

805-5032074766

Yes No
(c) Is this a "feeder fund" in a master-feeder arrangement?

r

r.

(d) If yes, what is the name and private fund identification number (if any) of the master fund in
which this private fund invests?
Name of the Private Fund:
Private Fund Identification Number:
(include the "805-" prefix also)

NOTE: You must complete question 6 for each master-feeder arrangement regardless of whether
you are filing a single Schedule 0, Section 7.6.(1). for the master-feeder arrangement or
reporting on the funds separately.
7.

II
II

If you are filing a single Schedule 0, Section 7.6.(1) for a master-feeder arrangement according
to the instructions to this Section 7.6.(1), for each of the feeder funds answer the following
questions:

---- ---- -------] I

II

II

No Information Filed

- - - ------

------~

NOTE: For purposes of questions 6 and 7, in a master-feeder arrangement, one or more funds
("feeder funds") invest all or substantially all of their assets in a single fund ("master fund"). A
fund would also be a "feeder fund" investing in a "master fund" for purposes of this question if it
issued multiple classes (or series) of shares or interests, and each class (or series) invests
substantially all of its assets in a single master fund.

I

Yes No
8.

r. r
r.

(a) Is this private fund a "fund of funds"?
(b) If yes, does the private fund invest in funds managed by you or by a related person?

r

NOTE: For purposes of this question only, answer "yes" if the fund invests 10 percent or more of
its total assets in other pooled investment vehicles, whether or not they are also private funds, or
registered investment companies.

Yes No
9.

II

During your last fiscal year, did the private fund invest in securities issued by investment
companies registered under the Investment Company Act of 1940 (other than "money
market funds," to the extent provided in Instruction 6.e.)?

r r.

I'I

10. What type of fund is the private fund?

r.

hedge fund

fund

r

r

liquidity fund

venture capital fund

r

r

private equity fund

r

real estate fund

r

securitized asset

Other private fund

NOTE : For funds of funds, refer to the funds in which the private fund invests. For definitions of
these fund types, please see Instruction 6 of the Instructions to Part 1A.

11. Current gross asset value of the private fund:

Ii

$--3-58;GOO;OOfI
$ 390,700,000
Ownership
12. Minimum investment commitment required of an investor in the private fund:

$ 1,000,000
NOTE : Report the amount routinely required of investors who are not your related persons (even
if different from the amount set forth in the organizational documents of the fund).

13. Approximate number of the private fund's beneficial owners:
W;

102
14. What is the approximate percentage of the private fund beneficially owned by you and your
related persons :
8%
15. What is the approximate percentage of the private fund beneficially owned (in the aggregate) by
funds of funds:

II

H
14%
16. What is the approximate percentage of the private fund beneficially owned by non-United States
persons:

II

10%

Your Advisory Services
Yes No
17. (a) Are you a subadviser to this private fund?

(b)

r

r.
I,

If the answer to question 17(a) is "yes," provide the name and SEC file number, if any, of the
adviser of the private fund. If the answer to question 17(a) is "no," leave this question blank.
No Information Filed
Yes No

18. (a) Do any other investment advisers advise the private fund?
I

I
I

t

I
I

I

I

r-

("

(b) If the answer to question 1B(a) is "yes," provide the name and SEC file number, if any, of the
other advisers to the private fund. If the answer to question 18(a) is "no," leave this question
blank.
- No Information Filed
L

--- --------,

--------

Yes No

(" r-

19. Are your clients solicited to invest in the private fund?

20. Approximately what percentage of your clients has invested in the private fund?

:I

0%
private Offering

Yes No

I

r

21. Does the private fund rely on an exemption from registration of its securities under
Regulation D of the Securities Act of 1933?

("

22. If yes, provide the private fund's Form D file number (if any):

I

Form 0 file number

B. SERVICE PROVIDERS
Auditors
Yes

No

rr-

("
("

23 . (a) (1) Are the private fund's financial statements subject to an annual audit?
(2) Are the financial statements prepared in accordance with U.S. GAAP?

If the answer to 23(a)(1) is "yes," respond to questions (b) through (f) below. If the private
fund uses more than one auditing firm, you must complete questions (b) through (f)
separately for each auditing firm .
Additional Auditor Information: 1 Record(s) Filed.

If the answer to 23(a)(1) is "yes," respond to questions (b) through (f) below. If the
private fund uses more than one auditing firm, you must complete questions (b)
through (f) separately for each auditing firm.

-I

(b) Name of the auditing firm :

JOSEPH DECOSIMO AND COMPANY, PLLC

"

I

(c) The location of the auditing firm's office responsible for the private fund's audit
(city, state and country):

II

City:
CHATTANOOGA

State:
Tennessee

II

Country:
United States
Yes No

(d) Is the auditing firm an independent public accountant?

("

. j

EXHIBIT J

FORM ADV
UNIFORM APPLICATION FOR INVESTMENT ADVISER REGISTRATION AND REPORT BY EXEMPT REPORTING ADVISERS
Primary Business Name: GERBER/TAYLOR MANAGEMENT COMPANY

CRD Number: 109319

Rev. 10/2012

Other-Than-Annual Amendment - All Sections
7/1/2015 11:32:39 AM

WARNING: Complete this form truthfully. False statements or omissions may result in denial of your application, revocation of your registration, or criminal
prosecution. You must keep this form updated by filing periodic amendments. See Form ADV General Instruction 4.
~I~
t=
e~l
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en
~t
=i~
~ing
~=
I~
n~
fo
~rm
~a
=t=
io
=n
~

___________________________________________________________________________________________ _____

Responses to this Item tell us who you are, where you are doing business, and how we can contact you.
A.

Your full legal name (if you are a sole proprietor, your last, first, and middle names):
GERBER/TAYLOR MANAGEMENT COMPANY

B.

Name under which you primarily conduct your advisory business, if different from Item 1.A.:
GERBER/TAYLOR MANAGEMENT COMPANY
List on Section 1.B. of Schedule D any additional names under which you conduct your advisory business.

C.

If this filing is reporting a change in your legal name (Item 1.A.) or primary business name (Item LB.), enter the new name and specify whether the
name change is of
your legal name or 0 your primary business name:

o
D.

(1) If you are registered with the SEC as an investment adviser, your SEC file number: 801-56698
(2) If you report to the SEC as an exempt reporting adviser, your SEC file number:

E.

If you have a number (nCRD Numbern) assigned by the FINRA's CRD system or by the lARD system, your CRD number: 109319
If your firm does not have a CRD number, skip this Item 1.E. Do not provide the CRD number of one of your officers, employees, or affiliates.

F.

Principal Office and Place of Business
(1) Address (do not use a P.O. Box):
Number and Street 1:
ONE COMMERCE SQUARE
City:
State:
MEMPHIS
Tennessee

Number and Street 2:
SUITE 1900
Country :
UNITED STATES

If this address is a private residence, check this box:

ZIP+4/Postal Code:
38103

0

List on Section 1.F. of Schedule D any office, other than your principal office and place of business, at which you conduct investment advisory business. If
you are applying for registration, or are registered, with one or more state securities authorities, you must list al/ of your offices in the state or states to
which you are applying for registration or with whom you are registered. If you are applying for SEC registration, if you are registered only with the SEC, or
if you are reporting to the SEC as an exempt reporting adviser, list the largest five offices in terms of numbers of employees.
(2) Days of week that you normally conduct business at your principal office and place of business:
c;; Monday - Friday Co other:
Normal business hours at this location:
8:00-5:00 CST/CDT
(3) Telephone number at this location:
901-526-9750
(4) Facsimile number at this location :
901-526-4385

G.

Mailing address, if different from your principal office and place of business address:
Number and Street 2:

Number and Street 1:
City :

If this address is a private residence, check this box:

H.

Country:

State:

ZIP+4/Postal Code :

0

If you are a sole proprietor, state your full residence address, if different from your principal office and place of business address in Item 1.F.:
Number and Street 2:

Number and Street 1:
City:

State:

Country:

ZIP+4/Postal Code:
Yes No

I.

Do you have one or more websites?

Yes No
23. (a) (1) Are the private fund's financial statements subject to an annual audit?
(2) Are the financial statements prepared in accordance with U.S. GAAP?
If the answer to 23(a)(1) is "yes," respond to questions (b) through (f) below. If the private fund uses more than one auditing firm, you must
complete questions (b) through (f) separately for each auditing firm.
Additional Auditor Information.: 1 Record(s) Filed.
If the answer to 23(a)(1) is "yes," respond to questions (b) through (f) below. If the private fund uses more than one auditing firm, you
must complete questions (b) through (f) separately for each auditing firm.

(b) Name of the auditing firm:
ELLIOTT DAVIS DECCOSIMO

(c) The location of the auditing firm's office responsible for the private fund's audit (city, state and country):
City:
CHATTANOOGA

State:
Tennessee

Country:
UNITED STATES
Yes No

(d) Is the auditing firm an independent public accountant?

(e) Is the auditing firm registered with the Public Company Accounting Oversight Board?

(f)

If "yes" to (e) above, is the auditing firm subject to regular inspection by the Public Company Accounting Oversight Board in
accordance with its rules?

Yes No
(g) Are the private fund's audited financia l statements distributed to the private fund's investors?
(h) Does the report prepared by the auditing firm contain an unqualified opinion?
@ Yes

0

No

0

Report Not Yet Received

If you check "Report Not Yet Received," you must promptly file an amendment to your Form ADV to update your response when the report is available.

Prime Broker
Yes No
24. (a) Does the private fund use one or more prime brokers?
If the answer to 24(a) is "yes," respond to questions (b) through (e) below for each prime broker the private fund uses. If the private fund uses
more than one prime broker, you must complete questions (b) through (e) separately for each prime broker.

No Information Filed

Custodian
Yes No
25. (a) Does the private fund use any custodians (including the prime brokers listed above) to hold some or all of its assets?
If the answer to 25(a) is "yes," respond to questions (b) through (f) below for each custodian the private fund uses. If the private fund uses
more than one custodian, you must complete questions (b) through (f) separately for each custodian.
Additional Custodian Information: 1 Record(s) Filed.

If the answer to 25(a) is "yes," respond to questions (b) through (f) below for each custodian the private fund uses. If the private fund uses
more than one custodian, you must complete questions (b) through (f) separately for each custodian.

(b) Legal name of custodian:
SUNTRUST BANK
(e) Primary business name of custodian:
SUNTRUST BANK
(d) The location of the custodian's office responsible for custody of the private fund's assets (city, state and country):
City:
MEMPHIS

State:
Tennessee

Country:
UNITED STATES