A fraudster who posed as a financial advisor will be eligible to earn that title in as little as five years – despite the angry objections of qualified players.
"Why did the SEC make such a big point of this?" asks Knut Rostad, the president of the Institute for the Fiduciary Standard, which supports an industrywide requirement that advisors put clients' best interests before their own. "The advisor is given a second chance notwithstanding a pattern of false statements. The entire industry is far, far too lenient on clearly false statements and outright fraudulent statements."
Rostad is pointing to the case south of the border where a Pennsylvania man fraudulently promoted himself as an advisor, but not just any advisor, a Fortune “Top 25 Rising Business Star.” He would sell a pooled investment vehicle to high-net-worth clients despite not being registered to do so.
Michael George Thomas paid the SEC $25,000 for this outright fabrication of the truth while also agreeing to stay out of the financial services industry for the next five years. Unbelievably, Thomas will be able work as an advisor after the five years are up.
The SEC promotes itself as the protector of investors yet it’s willing to give a man who’s routinely lied to the public a second chance.
"I think the SEC is afraid of its own shadow when it comes to Wall Street and that the public is not being treated the way it deserves to be," says former SEC special counsel and current University of South Carolina School of Law professor John Freeman. “This guy's conduct has all the hallmarks of a neon sign flashing, ‘Con artist, con artist, con artist.’”