Two Florida planners will appeal a judge's dismissal of their two-year-old lawsuit against the CFP Board regarding its authority to discipline planners, stating they want to right "grave wrongs."
"This road has been long for us and we do not undertake its continuation lightly," Jeffrey and Kimberly Camarda, of Fleming Island, Fla., said in statement. "We believe there are grave wrongs to be righted here, with the welfare of the profession, and of the client public, hanging in the balance."
In response, the board said it "stands behind [U.S. District Court Judge Richard] Leons determination that [it] complied with the law when it imposed a sanction, based upon a finding by other CFP professionals and members of the public, that the Camardas violated CFP Boards rules.
"We believe that the judges decision will stand and that an appeals court will agree with Judge Leon that [the] CFP Board 'followed its own rules throughout the disciplinary proceedings,' and that there is 'no evidence that [the board] was motivated by bad faith or ill will' in disciplining the Camardas."
The Camardas could have a tough battle given that little legal precedent exists permitting courts to insert themselves into the affairs of private nonprofits, except in cases where crimes have occurred.
Despite this fact, the pair say, they made their choice after "deep consideration."
"We believe there to be substantial legal merit for our appeal to be successful, and that we will ultimately prevail at the ensuing trial," they wrote. The case was filed in district court in Washington.
The board sought to punish the planners publicly for calling their practice fee-only while they owned a commission-taking insurance operation. Later, it decided not to punish hundreds of other advisors for claiming a fee-only status on the board's website despite taking commissions.
"We believe it has been quite misleading for [the] CFP Board to contend its process is fair, when it, for the same alleged offense, has offered resolutions ranging from blanket amnesty and private deals" for other CFPs," they wrote. Their statement also says the board made a political decision to punish its former Chairman Alan Goldfarb in a fee-only case and that the board violated their own confidentiality in discussing details of their case.
In dismissing the case based on pretrial evidence, Leon found that the board had properly followed its procedures in seeking to sanction the Camardas. However, he would not consider how the board treated other CFPs.
"Courts ordinarily will not interfere with the management and internal affairs of a voluntary association," Leon wrote. "Comparing how other applicants were treated by [the CFP Board] would take this court 'beyond the proper scope of review,'" he added, quoting a case precedent.
CFP Board Chairman Richard Rojeck hailed Leon's decision as "a significant victory" for the board, CFPs and profession.
"It affirms the integrity of the CFP certification," Rojeck said in a joint statement with the board's staff, and of the boards role as the standard-setting body for personal financial planners."
Several industry thought leaders bemoaned Leon's decision because it meant there would be no public examination of the board's disciplinary process, which unfolds behind closed doors.
Much of the evidence submitted to the court remains under seal and, absent a successful appeal, could remain confidential. The Camardas say they want it all to become public.
The CFP Boards "recent statements about us reveal a very small portion of the record in this case, and contain material and demonstrable falsehoods," they wrote. "We look forward to the day when the whole truth will be unsealed for all to see."
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