Wealth Management Founder Fined $1.24m Over Fiduciary Lapses

Jack Humphrey, Regulatory journalist
April 30, 2012 /

A Wisconsin federal court has issued a summary judgment imposing fines against the founder and Chief Executive Officer of Wealth Management LLC for breaching his fiduciary duty in the company.

The court’s decision comes in favor of the US Securities and Exchange Commission which filed a complaint in May 2009 against James Putman. Wealth Management LLC is a registered investment adviser located in Appleton, Wisconsin.

The SEC said in its complaint that Putnam improperly accepted $1.24 million in 2006 and 2007 in undisclosed payments derived from life insurance premium financing investments made by WM’s clients. The complaint further alleged that Putman breached his fiduciary duty and engaged in fraud by misrepresenting the safety and stability of WM’s clients’ investments.

The court’s decision orders Putman to pay disgorgement and prejudgment interest in the amount of $1,530,129 and a civil money penalty of $130,000, for a total amount of $1,660,129.

 

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