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Unauthorized Ownership Transfer Results in $6,000 Forfeiture

A series of stock transfers resulted in unauthorized transfer of five radio stations in Mississippi

A licensee that admitted to transferring control of its Mississippi radio stations without authorization has entered into a consent decree with the Federal Communications Commission to resolve the issue. 

In was in June 2020 that Radio Cleveland filed an application to transfer control of station WAID(FM) in Clarksdale, Miss., followed by a second transfer request three months later for another four stations: WCLD(AM) and WCLD(FM) of Cleveland; WKDJ(FM) of Clarksdale; and WMJW(FM) of Rosedale. 

Specifically, the principals of Radio Cleveland — Clint L. Webster and Greg Shurden —  sought to transfer 50% of Radio Cleveland shares to another individual, Kevin W. Cox. Individually, Webster sought to transfer 45% of shares to Cox while Shurden sought to transfer 10%, resulting in Cox holding 100% of the voting and ownership interest in Radio Cleveland. However, the two purchasing agreements that were submitted with the applications showed that the stock transfers already happened.

That’s against the rules laid out in the Communications Act, which states that no construction permit or station license can be transferred to any person until it has been approved by the commission. FCC Rules state something similar — that prior consent of the commission must be obtained for transfer of control. 

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Radio Cleveland agreed that it had violated the Communications Act and FCC Rules when Webster and Shurden transferred a controlling interest of the company to Cox before receiving FCC consent. 

In agreeing to the consent decree, Radio Cleveland also agreed to make a $6,000 civil penalty. This amount is less than the standard base forfeiture of $8,000 for similar violations, a move that the bureau has the authority to make. When entering into a consent decree, the bureau takes into account the nature and gravity of the violation, including any history of prior offenses and the ability to pay. “We find that a reduction from the $8,000 base forfeiture amount for an unauthorized substantial transfer of control is appropriate on the basis that Radio Cleveland does not have a history of prior offenses,” the bureau said.

However, the bureau said that since Webster, Shurden and Cox engaged in an unauthorized transfer of control, the commission may take that fact into account when it comes to future applications, proceedings or enforcement actions.