Wealth Briefs: Our weekly roundup of financial planning news and notes

April 25, 2022 2:55 PM

The FPA's political action committee put pressure on the Kentucky legislature's proposal to tax “personal financial planning” and “personal investment management." A personal assistant stole from an NBA player and got jail time. UBS dropped an appeal and paid out $14.1 million to a former compliance officer. And more in this week's wealth briefs.

Scroll down to see what happened the last week in wealth management.

FPA’s Political Action Committee helps eliminate sales tax proposal in Kentucky

A proposed bill in the Kentucky legislature included a provision charging sales taxes on “personal financial planning” and “personal investment management” until the FPA and its Kentuckiana chapter mobilized against it. State lawmakers are seeking to drop the state income tax in favor of taxes on services. On April 14, FPA CEO Patrick Mahoney announced that member op-eds and lobbying efforts had helped convince the legislature to put the kibosh on any taxes on planning or portfolio management. “FPA will continue to provide our members with a voice and is ready to deploy its resources to protect them and their interests,” Mahoney said in a statement. “Over the past few weeks, what we have done in Kentucky will serve as a model for future legislative advocacy efforts for the Association.”

Former UBS broker pleads guilty to defrauding clients for $5.8M

German Nino, a former UBS broker accused in January of bilking clients for $5.8 million, pleaded guilty to fraud charges in Miami federal court. The onetime Miami broker used unauthorized wire transfers and materially false and fraudulent statements to steal clients’ money and spend it on several of his romantic partners, among other personal uses, according to investigators. The judge in Nino’s case scheduled his sentencing hearing for late June.

Former personal assistant to NBA player gets nearly 6 years for $4.7M theft

Theodore Itsvan Joseph Kritza, who reportedly once acted as the personal assistant to retired NBA player Richard Jefferson, received a federal prison sentence of five years and 10 months after pleading guilty to bank and wire fraud in the district court of Tucson, Arizona. Between 2005 and 2012, Kritza forged Jefferson’s signature on more than two dozen documents as part of the theft of $4.7 million, according to federal prosecutors. “For years, Theodore Kritza preyed upon the trust he gained with the victim and defrauded him of his hard-earned money and savings, choosing greed over trust. Today, Kritza found out the cost of his scheme,” Sean Kaul, the special agent in charge of the FBI’s Phoenix office, said in a statement. “This sentencing sends a clear message that fraud is a serious crime, with serious consequences.”

Financial advisor facing fraud charges incarcerated after Virgin Islands trip

A onetime Raymond James Financial Services and Edward Jones broker named Michael F. Shillin violated his pretrial release on fraud charges by taking an unauthorized trip to the U.S. Virgin Islands earlier this month, according to a report in The Leader-Telegram of Eau Claire, Wisconsin. Shillin is facing nine counts of wire fraud and one count of bank fraud based on allegations involving misrepresentations and fraudulent documents. His probation officer and federal prosecutors had earlier declined his request to take a trip to Antigua in late March, and he found himself detained by customs officers at the airport in St. Thomas after a five-day vacation with his girlfriend, according to the local newspaper. The judge in the case ordered him held behind bars ahead of the trial.

Galvin’s office bans company accused of pushing fake Airbnb property investments

A company called ReAlpha Asset Management pitched investors on flipping properties for Airbnb rentals through stock photos and fake addresses in destinations like Miami, Hilton Head and Colorado Springs, according to Massachusetts Secretary of the Commonwealth William Galvin’s office. ReAlpha settled the state securities regulator’s case by agreeing to a ban from the industry in the state and a fine of $375,000.

Dropping its appeals of arbitration case, UBS pays former compliance officer $14.1M

About four years after its firing of onetime Chicago regional compliance manager Mark Munizzi, UBS has finally dropped its lengthy and costly appeal of his arbitration award of $11.1 million, the news outlet AdvisorHub reported. At the time of his firing, UBS had accused Munizzi of supervisory failures in his role with the firm. The overall wire transfer of $14.1 million after the impact of lengthy appeals by UBS offers a hopeful case for any registered representatives who have alleged that their brokerage defamed them in a Form U5 disclosure.

Barred ex-advisor pleads guilty to fraud and failure to file taxes

Richard Kessler, a 50-year-old resident of Alburquerque who once operated Guardian Group Investments, pleaded guilty in federal court on April 18 to one count each of mail fraud and wire fraud and four counts of failure to file tax returns. Between February and August 2016, Kessler amassed $121,267 from four victims after pledging to put it into retirement accounts, only to deposit the money into his business bank account, according to federal prosecutors. In addition, he didn’t file any tax returns from 2014 to 2017, investigators say. The charges carry a maximum sentence of up to 44 years in prison.

$4B RIA holds conference at a Four Seasons in Texas

Sowell Management, a privately held RIA with more than $4 billion in client assets, held its annual Sowell Summit on April 20-22 in Las Colinas, Texas, at the Four Seasons Resort and Club Dallas at Las Colinas. The speakers included Riskalyze CEO Aaron Klein, DeVoe & Company founder David DeVoe and Rachel Wilson, a former NSA official who is now the head of data protection and infrastructure risk with Morgan Stanley. “We’ve planned an inspiring and motivating lineup of some of the best speakers, influencers and experts to help our advisors grow and answer the pressing questions facing our industry,” Bill Sowell, the CEO of Sowell Management, said in a statement. “The Sowell Management team is extremely grateful to be face to face with our trusted partners after a two-year hiatus due to COVID.”

2022 Retirement Industry Conference coming up May 11-13

The LIMRA and Society of Actuaries’ 2022 Retirement Industry Conference will take place next month in Boston, where experts from major firms and the industry research organization that houses the Secure Retirement Institute will speak during a three-day program. “The pandemic-induced economic challenges — like inflation — are undermining consumers’ ability to save for retirement and upending the plans retirees have made,” David Levenson, the CEO of LIMRA, LOMA and LL Global, said in a statement. “Our industry serves an important purpose in helping clients adequately plan for retirement. This year’s conference will give leaders the opportunity to delve into factors that are shaping the future of the retirement market.”

Chartered Alternative Investment Analyst Association launches educational platform

A professional organization for the global alternative investment industry, the Chartered Alternative Investment Analyst Association, started a new educational service enabling financial advisors and other wealth management professionals to take courses and gain proficiency with topics such as private credit, private equity and digital assets. The platform is called UniFi by CAIA. “Clients are finding their desired financial outcomes to be ever more elusive, resulting in a wave of new and innovative investment products coming to market,” Aaron Filbeck, the head of UniFi by CAIA, said in a statement. “Of course, this sparks a great deal of investor interest but also highlights a critical education gap across the entire value chain of the private wealth management industry. Current educational offerings might not provide the right type of solutions for many of these professionals, which is why we’ve created UniFi and designed the platform to allow participants to ‘choose their own adventure,’ educate themselves and build more resilient portfolios to meet their client’s objectives.”