A husband-and-wife planning firm and the CFP Board have traded jabs in court over whether the planners can seek damages in their lawsuit against the board.
In the latest round of pretrial filings, the planners accuse the board of violating antitrust regulations allegations the board denies. The underlying dispute stems from the boards decision in 2011 to publicly sanction Jeffrey and Kimberly Camarda of Fleming Island, Fla., for calling their practice fee-only, allegedly against the boards rules. The board has not yet published that sanction, originally scheduled for January, while the lawsuit is pending. In hopes of stopping it, the planners in June sued the board in U.S. District Court in Washington.
The Camardas in late September amended their original complaint to ask for unspecified damages because, they say, negative publicity surrounding the case has hurt their ability to attract clients. Among other arguments, the Camardas accused the board of breach of contract and of violating antitrust laws under the Sherman Antitrust Act, which bars business activities deemed anticompetitive.
The Camardas own a financial planning firm, Camarda Wealth Advisory Group. The board argues they cannot call the practice fee-only because it generates commissions through their separate insurance company. The planners counter that the insurance company is a separate entity that transacts minimal business.
The lawsuit is at the root of an ongoing controversy over use of the term fee-only and is tied to accusations that the board practices a selective disciplinary process, a claim the board denies.
CFP BOARD RESPONDS
In response to the Camardas amended complaint, the board filed documents with the court on Oct. 15 arguing that the request for damages appears to be a last-minute strategy to create negotiating leverage and increase the costs of defense. The Camardas claims have no basis in fact or law, the board says. The board asked the court to deny the request for damages on the grounds that the court would ultimately deem it futile.
The board also argues that the Camardas fail to sufficiently make their antitrust argument, noting among other things the number of alternate certifications and designations in the financial planning marketplace. In addition, the board states that enforcement of professional standards supports the development of commercial competition. It contends that antitrust laws are designed to protect competition, not specific competitors.
In a response filed on Oct. 25, the Camardas insist their amended complaint is valid and timely. By threatening to sanction them, the board has harmed the competitive landscape for themselves and all CFPs, the Camardas claim.
While it may be true that enforcing standards enhances competition, the Camardas say in their filing, the boards enactment of vague rules governing members conduct and discipline, enforcement of those rules in an arbitrary and capricious manner, failure to provide [them] with due process, and unwarranted and disproportionate disciplinary action ... are anticompetitive.
The planners further accuse the board of engaging in a conspiracy that, by diminishing the value of the CFP designation, harmed all CFP certificants. This amounts to antitrust injury for which plaintiffs have standing to sue because they have been injured by the same misconduct, the filing says.
Asked to respond to the latest accusations, CFP Board spokesman Dan Drummond said, The Camardas amended complaint, like their initial complaint, is without merit.
- Florida Planners Suing CFP Board Seek Damages
- CFP Board Strips Fee-Only Listing From its Website
- Lawsuit Sends Fee-Only Debate to Court