This is the SEC’s second request for information about Adam Cloud.
The federal Securities and Exchange Commission wants to know more about the relationship between Hartford Treasurer Adam Cloud and the off-the-air, state-funded golf channel called the Back9Network.
Officials at Hartford City Hall have confirmed that the SEC’s senior enforcement counsel in Boston asked for Cloud’s public emails concerning Back9. The request came in late October, following WNPR’s stories that showed Cloud repeatedly used his city email to steer private investment to the golf network -- a firm with which both his brother and his father did business.
This is the SEC’s second request for information about Cloud, whose office manages $1 billion in pension assets on behalf of the city’s retirees. Earlier this year, the federal agency subpoenaed his 2011 and 2015 campaign finance filings. At the time, his attorney, John Droney, said the action was the result of a political smear job before an election. He added that Cloud had done nothing wrong, an assertion he maintains.
“Adam Cloud has not broken any law or violated any ethics rules,” Droney said in an email to WNPR about the new SEC request. Droney, who is paid by the city to be Cloud’s counsel, said he didn’t know what the SEC was interested in. But he suggested it was merely being thorough so as “to avoid any criticism when they reveal that their investigation has gone nowhere.”
It’s unclear what the SEC is looking for -- though in its subpoena, it did say that it was “trying to determine whether there have been any violations of the federal securities law.” After the subpoena was sent back in July, WNPR filed a freedom of information request with the city asking for whatever information was responsive that subpoena.
That information included a 2011 email from Cloud to a private investor named Robert Smith of Vista Equity Partners. Cloud began the note talking about city business. But he ended it with a pitch for Back9.
“Back 9 plans to become the premium lifestyle and entertainment network for golf fans globally,” Cloud wrote. “The margins are in the 60% range, well short of Vista's but compelling nonetheless.
“I share it with you only because I get the sense that you are a man that likes to be on the ground floor of great ideas!” he wrote.
At the time, Cloud’s brother, Christopher Cloud, was already working as Back9’s state lobbyist; his father, Sanford Cloud, Jr., would soon be the company’s landlord. Later, Back9 got about $5 million from the state. The city eventually invested millions of dollars in pension funds with Vista, though Vista never invested in Back9.
After the story appeared, Cloud apologized for using his city email to try and get a private firm to invest in Back9. Through Droney, he said he couldn’t “recall ever contacting any other investors” on the company’s behalf.
But that proved untrue. A subsequent freedom of information request to the city yielded numerous emails between Cloud and people in the financial industry regarding Back9. The contact began in 2011, shortly after the treasurer’s brother started working for the golf network, and it continued through 2014 -- months before Back9 would run out of money and all but evaporate.
Again, Droney defended his client.
“He does not apologize for promoting Hartford businesses,” Droney wrote to WNPR. “There is no connection between investments in the Back9Network and doing business with the City of Hartford.”
A spokeswoman for the SEC declined to comment. Efforts to reach Back9 were unsuccessful.
