Strange but true: N.H. securities chief quits to blow whistle on other regulator

New Hampshire’s top securities regulator said Monday he is stepping down so he can speak up about how government mishandled a mortgage company accused of running a multimillion-dollar Ponzi scheme.

Mark Connolly, whose resignation as director of the Bureau of Securities regulation takes effect May 14, said it would be impossible for him to remain a state employee while arguing that the public’s best interest hasn’t been served when it comes to Financial Resources Management.

The company and its president, Scott Farah, have been accused of swindling hundreds of investors out of at least $80 million. Since it closed abruptly in November, dozens of former investors have sued the company, and federal authorities have brought criminal wire fraud charges. Farah has pleaded not guilty; his trial is set for June.

Connolly released a report last week concluding that most of the company’s actions fell outside his office’s jurisdiction. He placed most of the blame on the state banking department, which he also chastised for not releasing all its records regarding the failed company.

“During the past several weeks, as the bureau has conducted its investigation of this matter, my role has evolved unexpectedly into one of a whistle blower,” Connolly said Monday. “There is no reason why all records of this failed company should not be made available for public inspection.”

Connolly said he hoped his resignation would end what he called a political blame game.

“In leaving, I intend to be candid and engaged in a way that I could not be as regulator, and I intend to communicate that to the Joint House-Senate Legislative committee that begins its open inquiry into this situation later this week.”

Banking Commissioner Peter Hildredth was not immediately available for comment Monday. Last week, he said the legislative hearings would be the appropriate forum in which to discuss the matter.

Connolly has led the securities bureau for eight years. He said he had planned to resign last year, before the Ponzi scheme came to light, but stayed on to finish other business.