Shareholder Spotlight : Hamlin Capital Management – Betting on Pollution and Getting Burned

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In the grimy sewer of high finance, where suits sharper than switchblades slice through people’s savings, Hamlin Capital Management LLC stands out as a particularly slimy operator. This New York-based outfit, masquerading as a guardian of wealth for the wealthy, manages billions in municipal bonds and dividend-chasing equities, all while peddling the illusion of trust to high-net-worth suckers and institutions. But peel back the veneer, and you find a nest of self-serving bullshit artists who’ve repeatedly bent rules to line their pockets, leaving clients holding the bag. It’s the kind of operation that makes you want to spit – a firm that’s been slapped by regulators not once, but twice, for practices that reek of favouritism and half-arsed disclosures. And now, add to that their cosy investment in Cummins Inc., a company caught red-handed in one of the biggest emissions-cheating scandals in recent memory. Fuck me, if this isn’t a perfect snapshot of how these bastards operate, prioritising profits over principles, then I don’t know what is.

Hamlin’s not some rogue trader in a basement; they’re registered with the SEC, boasting over $7 billion under management. Yet, their track record screams hypocrisy. They preach about preserving wealth and generating income, but their actions tell a different story – one of quiet betrayal, where the little guy gets shafted while the firm skates on thin ice. Let’s dive into the muck, shall we? Because if we’re going to call out these pricks, we might as well do it properly, with the facts laid bare.

And yes, let’s confirm: Hamlin Capital Management is indeed a significant investor in Cummins Inc., holding approximately 542,240 shares valued at around $178 million as of mid-2025, making it about 4.1% of their portfolio. That’s no small bet on a firm that agreed to a whopping $1.675 billion settlement with the EPA and DOJ for installing software defeat devices on hundreds of thousands of diesel engines, dodging emissions tests and pumping out illegal pollution. Hamlin’s just another investor willing to buy into the dirty ecosystem that TCAP is out to expose, throwing cash at polluters while pretending their hands are clean. It’s infuriating – these wankers chase yields from companies that choke the planet, all in the name of fiduciary duty. Bollocks.

Cross-Trading Shenanigans: Favouring Buyers, Screwing Sellers

Picture this: between late 2011 and early 2016, Hamlin executed over 15,000 cross trades in thinly-traded municipal bonds, shuffling them between client accounts like some backroom poker game. These weren’t arm’s-length deals; they were internal hustles routed through third-party brokers at razor-thin spreads. Sounds efficient, right? Wrong. The firm priced them consistently at the bid-side, which meant buyers got a sweet deal, dodging the full market spread, while sellers – often those cashing out or terminating accounts – got stiffed out of their fair share of savings. We’re talking $829,344 in perks for the buyers, but a $414,672 hit to the sellers. That’s not oversight; that’s deliberate favouritism, plain and fucking simple.

It gets worse. On at least eight occasions from 2011 to 2013, Hamlin’s portfolio managers challenged underwriter bid prices, jacking them up without a shred of documentation or market basis, leading to 21 trades where buyers overpaid by $194,500. No valuation committee until mid-2014, policies that let managers run wild – it was a recipe for chaos. And their disclosures? Laughable. Forms ADV claimed trades at “independent current market prices,” which was bollocks. The SEC nailed them for violations of the Investment Advisers Act, calling it negligent fraud and a failure to implement proper safeguards. Hamlin settled in 2018 without admitting guilt, coughing up a $900,000 penalty, a censure, and a cease-and-desist order. They even reimbursed clients $609,172 plus interest beforehand, like that washes away the stench. But come on, who the hell thinks that’s enough? It’s a slap on the wrist for systematically tilting the scales.

These cross trades weren’t just sloppy; they were a blatant power play, exploiting the opacity of municipal bonds to shift value from one client to another. Imagine trusting these tossers with your nest egg, only to find out they’ve been playing favourites behind closed doors. The firm’s lack of oversight screams incompetence at best, malice at worst. And in a market where trust is currency, this kind of crap erodes everything. Pisses me off – investors deserve better than this shady nonsense.

Undisclosed Conflicts: Charter Schools and Bond Buys Gone Wrong

Fast-forward to 2024, and Hamlin’s affiliate, Hamlin Capital Advisors LLC, gets dragged into the spotlight for more dodgy dealings. This time, it’s about failing to spill the beans on glaring conflicts of interest with charter school clients. From 2017 to 2022, the affiliate advised on over $500 million in municipal bond issuances for these schools or related borrowers. In every single deal, Hamlin’s investment adviser arm – that’s the main Capital Management crew – snapped up all or most of the bonds, often acting as the paid bondholder rep too.

This setup screamed conflict: the advisor had a financial incentive tied to its sibling firm profiting from the very transactions it was guiding. But disclosures? They came late, days or weeks after advice started, and when they did arrive, they were piss-poor – just vague nods to shared ownership and potential fees, no real explanation of the risks or how they’d mitigate them. Advisory agreements lied about service scopes, and supervisory checks were woefully inadequate. The SEC hammered them for breaching fiduciary duties under the Securities Exchange Act and Municipal Securities Rulemaking Board rules on fair dealing, non-solicitor duties, and compliance.

Without admitting or denying, Hamlin Advisors and its managing director, Michael Ferrell Braun, settled with a cease-and-desist, censure, and penalties totalling $275,000 – $200,000 for the firm, $75,000 for Braun. It’s another example of these arseholes putting self-interest ahead of clients, especially vulnerable ones like charter schools scraping for funding. How do you sleep at night advising non-profits while your mates hoover up the bonds? It’s predatory, pure and simple, and it underscores a pattern: Hamlin’s ecosystem thrives on hidden agendas and half-truths.

Think about the ripple effects – charter schools, already underfunded and battling bureaucracy, get saddled with advice tainted by undisclosed biases. The firm’s failure to come clean isn’t just lazy; it’s a betrayal that could inflate costs or skew decisions. Bloody outrageous, if you ask me. Regulators caught them, but how many other deals slipped through unchecked? This isn’t isolated; it’s symptomatic of an industry riddled with such filth.

Betting Big on Emissions Cheaters: The Cummins Connection

Now, let’s circle back to that Cummins stake, because it ties the whole rotten mess together. Hamlin’s poured $178 million into a company that, in 2024, forked over $1.675 billion – the largest Clean Air Act penalty ever – for fitting defeat devices on nearly 630,000 Ram truck engines and 96,000 stationary ones. These gadgets bypassed emissions controls during real-world use, spewing excess nitrogen oxides into the air we all breathe. Cummins also committed to spending $325 million on fixes like recalls and tech upgrades. The DOJ and EPA called it a massive violation, with California piling on for state-level breaches.

Hamlin’s investment isn’t passive; it’s a hefty chunk of their holdings, signalling approval of Cummins’ business model despite the scandal. Why chase dividends from a polluter when the planet’s choking? It’s greedy hypocrisy at its finest, especially for a firm already dinged for ethical lapses. And as TCAP shines a light on these environmental crooks, Hamlin emerges as yet another enabler, funnelling capital into the very machinery of deception. Makes my blood boil – these financiers act like they’re above the fray, but they’re knee-deep in the sludge.

This isn’t just about one stock; it’s about a mindset. Hamlin’s portfolio choices reveal a willingness to overlook egregious wrongs for a quick buck. Investors should be furious, demanding transparency instead of this cloak-and-dagger crap. If Hamlin can’t keep its own house clean, why trust them with yours?

In the end, Hamlin Capital Management embodies everything wrong with Wall Street’s underbelly: regulatory slaps treated like parking tickets, conflicts swept under the rug, and bets on planet-trashing giants like Cummins. They’ve reimbursed here, settled there, but the pattern persists – a cycle of deceit that erodes faith in the system. Time to call bullshit and hold these bastards accountable. If you’re invested with them, ask hard questions; if not, steer clear. The financial world’s full of sharks, and Hamlin’s swimming right alongside the worst.

Lee Thompson – Founder, The Cummins Accountability Project

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