Fraud case complicates Ayotte bid

[ccharles000]

The resignation of a top New Hampshire securities regulator over the handling of the state’s largest fraud case could pose potential political problems for former Attorney General Kelly Ayotte’s GOP Senate campaign.

Bureau of Securities Regulation director Mark Connelly announced Monday he was resigning effective May 14 to become a whistleblower in what he called “a state government cover-up” involving Financial Resources Mortgage Inc (FRM).

Connelly recently issued a report that said the state Banking Commission and attorney general’s office was in part to blame for not stopping FRM from allegedly defrauding between $80 and $100 million dollars from Granite State investors.

“Unfortunately, this report suggests that certain agencies, particularly the Office of the Attorney General and the state Banking Department, did not rise to the challenge when presented with information that clearly demonstrated significant regulatory and other violations at FRM.”

http://www.politico.com/news/stories/0510/36725.html