There’s been a recent resurgence of alleged information about my reputation and resignation from Questar Capital. Due to this misinformation and re-circulation of said misinformation I felt it was time to issue a rebuttal to this situation in an attempt to clear the air, so to speak.
I value your opinion of me and it is important to share my side of the story, especially since it seems to still have some weight and potentially threaten my credibility as a trusted financial mind and educator.
It’s important that you know I was never really under investigation with Questar Capital, even though some information you may find if you’re digging will tell you “I refused to cooperate with an investigation.”
In 2012, Questar Capital held my securities license which I had used from time to time in the years that I affiliated with them. In 2014 I had approached their compliance office about how the industry was changing and that I was using this license less and less and that my long-term plan was to move forward without this license. Online brokerage accounts would allow my clients to self-invest in 3rd Party Managed Accounts with lower fees, more transparency, and potentially lower risk of investment loss due to that transparency of fees and investment activity.
This wasn’t typical yet of the industry in 2014/2015 but the trend was clearly underway. Since 2015, according to statistics provided by FINRA, there has been an average of more than 7% (45,186 securities licensed individuals) leaving the securities industry each year. There are many reasons for this. My personal reasoning for leaving that part of our industry was that in the near future I believed online brokerage accounts (which offered many of the same 3rd party managed money accounts as most local investment brokers but at a deep discount) would make more sense for investors. I believed that the client would need more focused, tax-aware planning, and risk management to bring maximum value to them in the coming years.
Regardless of my true intentions for wishing to separate from Questar Capital, an online robo-post claiming I was being ‘investigated for potential investor losses’ started to gain some momentum. I had been a recent victim of a ponzi scheme that had been operated by a popular, well established and approved brokerage firm. (This meant that a security that I once purchased as a legitimate security turned out to be a non-registered security).
As a victim of the scheme, my name appeared on the US Dept of Justice victim list, and it is still there today. It appeared that ‘ambulance-chasing’ type attorneys like to connect victims of investment schemes who hold a securities license to the scheme itself. It seems as if their hopes are that the victim was more involved in the scheme than what appears on the surface and they can stir-up new clients for their firm. I quickly found myself in an uphill battle to clear my name, even though it is legally documented by the FBI and the US Dept of Justice that I was not an orchestrator of any ponzi scheme, but rather a victim of it.
In an aggressive attempt to resolve this huge misunderstanding and misrepresentation, FINRA requested and I agree to fully participate in a 7 ½ hour on-the-record interview at FINRA’s (Financial Industry Regulatory Authority) New York headquarters in May 2015. I quickly accepted this opportunity without hesitation. The 7 ½ hour on-the-record interview produced no findings of wrongdoing, no complaints, and no fines levied from FINRA. This OTR interview was the first and only request by FINRA for any cooperation with them in any capacity and it should be noted that during this OTR interview at no point did I ever not fully and completely cooperate with them. The results of the 7 ½ hour interview was that they had ‘a solution’ that could save me time, money, and frustration.
The problem with this solution was that in order to utilize their ‘potential solution’, there had to be justification to offer the solution due to ‘findings of wrongdoings’ that meet the criteria to offer an Acceptance of Waiver and Consent (AWC). According to FINRA, the OTR interview did not produce such adequate findings. However, there was a ‘workaround’ that was created and offered to me by FINRA that they made available to me on September 3, 2015. The way their comments were worded could easily be misinterpreted, and were on many occasions.
Perhaps in an effort to assist with a better understanding for anyone who would read these comments, on June 4, 2020 FINRA offered me the opportunity to post a comment that they would in-turn officially post to their Broker-Check site on my behalf. I authored comments and they accepted them. This has afforded me the chance to finally provide the details of what took place with the AWC and allow me to regain some much deserved dignity. FINRA posted the following comments provided by me and accepted by them:
“I did fully participate in FINRA’s OTR interview at the FINRA Headquarters in New York. I provided seven and one-half hours of OTR Testimony for the matter related to the FINRA ‘Acceptance of Waiver and Consent’ (AWC). No complaint was filed by FINRA. FINRA responded some time later and informed me that I could appear for another OTR interview or accept a settlement. At the time of the offer of settlement, FINRA had no findings of a violation to be able to offer an AWC. To be able to offer the AWC I would have to ‘refuse’ to provide testimony at a future yet-to-be determined OTR hearing. That would create a violation of FINRA Rule 8210 and 2010 allowing FINRA to offer me an AWC which I accepted on the advice of counsel.” June 4, 2020
While I do not deny entering into the AWC under the circumstances I have described. The fallout from the way the AWC was worded in 2015 seemed extremely misleading and caused concern from other entities. It ultimately pulled me into a hearing with the Ohio Department of Insurance as well as a Cease and Desist Order from the Ohio Department of Commerce along with a slew of ambulance-chasing attorneys from various parts of the country.
Thank you for taking the time to hear my side of the story. When we all meet our maker one day, all we die with is our name and reputation. You may never know how the advisor you are working with would handle major adversity, but you know without a doubt how I did handle it and how I would if faced with something like this again in the future.