Disciplinary Chief Exits CFP Board
Michael Shaw is out as the head of the CFP Board's embattled disciplinary division -- and the CFP Board has hired a heavy-hitting regulatory veteran into another top disciplinary role.
The board confirmed the recent departure and said it has tapped a former longtime high-ranking SEC official, John Loesch, as director of investigations. Loesch joined the board in September, according to his Linkedin profile.
The board is "deeply grateful" for Shaw's contribution to the firm, the board said in a statement regarding Shaw's departure.
"Michael leaves an important legacy and substantive accomplishments during his tenure," the statement says. "His accomplishments furthered CFP Boards strong reputation for holding CFPprofessionals to the highest standards of ethical and professional responsibility."
The board declined to say whether Shaw was leaving of his own volition, and whether he would be replaced. Shaw's last day was Dec. 12, the board said.
One outspoken industry commentator praised the board's parting of ways with Shaw.
"Regardless of the reasons, Michael Shaws departure provides the CFP Board with the opportunity to restore confidence in the CFP Board -- provided that the CFP Board were to hire the right individual as a replacement," said Ron Rhoades, an assistant professor in Alfred State University's planning program.
The board did not announce Loesch's hiring publicly, and as of Thursday afternoon his name was not on its website. But Loesch's LinkedIn profile, which says he has held the position since September, shows a depth of investigatory experience.
Neither Loesch nor Shaw could be reached for comment.
During his 11-year tenure with the SEC, Loesch held a variety of positions including branch chief in the Division of Enforcement; according to his LinkedIn profile, he "conducted and supervised investigations involving accounting and disclosure fraud, insider trading, FCPA violations and market manipulation."
He also was "awarded Chairman's Award for Excellence and special commendation from the Director of the FBI for work on the investigation of Enron Corporation," the profile says.
Other roles include, most recently, director of anti-corruption compliance at a technology firm called CSC in Falls Church, Va., and a stint as "special inspector general" for the Troubled Asset Relief Program.
DISCIPLINARY PROCESS UNDER FIRE
The board's disciplinary efforts have endured a series of firestorms over the last few years, with critics calling the procedures unfair and enforcement uneven.
Dan Moisand, a former chairman of the board's volunteer disciplinary and ethics commission, says he hopes that the board can make a new start with its disciplinary policies following staff changes -- but fears it may not.
"All the events of the last couple of years revolving around the [board's] enforcement of the disciplinary and ethics standards are disturbing," Moisand says.
Shaw was CFP Board CEO Kevin Keller's first hire after the latter joined the board seven years ago. Several former board officials faulted Keller's unwavering support of Shaw, and both board veterans and other prominent planners suggested that Keller should leave as well -- although many declined to be named, saying they feared repercussions from the board.
"They should both be gone," says Tina Florence, a former member of the board's disciplinary commission who received a private letter of sanction over an alleged compensation disclosure in 2013.
One primary criticism of the board centers on the fact that while the board was investigating and punishing her, and other advisors like her, over compensation disclosures, it granted a broad amnesty to hundreds of other advisors who were describing themselves (incorrectly) as "fee-only" on the board's website.
Earlier this year, the board admitted it was a "mistake" not to actively bar wirehouse and other advisors from doing so.
Kahler's situation has prompted confusion and more criticism among other planners because the board's rules say CFPs cannot use the term if any of their "related parties" take commissions. Before receiving the ruling, however, Kahler began removing his CFP designation from his website and all his marketing materials, and says he says he will not be reinstating it.
Kahler describes Shaw as "ineffective" and says their interactions were characterized by "miscommunication and misstatements."
"The fact that he is leaving, I think, in the big picture is probably a net positive," says Kahler.
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