Two planners who are suing the CFP Board amended their complaint to seek unspecified damages in addition to earlier claims seeking an admission of fault from the board as well as the quashing of a public sanction for calling their practice fee-only.
Since filing their suit in June, publicity around the case has damaged their reputation and heightened the risk that they will lose clients, Jeffrey and Kimberly Camarda of Fleming Island, Fla., allege in the revised complaint filed Friday in U.S. District Court in Washington. The boards disciplinary process is unfair and capricious, the suit claims.
CFP Board spokesman Dan Drummond counters, As with the original complaint, we believe the amended complaint is without merit.
The suit is at the heart of an ongoing controversy involving the board because it led to the public sanction of the boards former chairman, Alan Goldfarb, and two other board officials for similar compensation disclosure violations, according to multiple current and former board officials.
The board punished the former officials in an attempt to avert a lawsuit from the Camardas by establishing a pattern of similar enforcement actions, according to Goldfarb and Tina Florence, one of two former members of the boards disciplinary panel who were sanctioned privately for compensation disclosure violations.
The board told the Camardas in 2011 that it planned to publish a public letter of sanction against them because they called their practice fee-only, according to the couple.
The connection between the cases led to further revelations, including the fact that the sanctions occurred while the board was allowing hundreds of advisors at wirehouses, banks, insurance companies and independent broker-dealers to openly break its compensation disclosure rules by calling themselves fee-only on the boards website.
CFP Boards Chief Executive Kevin Keller has defended the boards disciplinary process as fair.
There is no double standard for enforcement, Keller says. We expect all of our CFP professionals to adhere to our rules and our ethical standards.
The board unilaterally stripped all fee-only listings from its website on Sept. 19, hours after Financial Planning revealed the widespread rule-breaking. The next day, the board offered an amnesty to all of those advisors and asked them to reconsider whether their compensation disclosures were listed accurately. The organization has not disclosed whether it will reconsider the sanctions already handed down or those currently under investigation.
We reiterate that we did not seek to make this dispute public, a spokesman for the Camardas says in a statement. But the board's refusal to rescind its threats against us or yield in any fashion at every step has left us no other choice.
The couple, who own Camarda Wealth Advisory Group and an insurance agency, Camarda Consultants, sued the board to prevent it from sanctioning them with a public letter for calling their wealth management firm fee-only while they also own an insurance firm. They also sought a declaration from the court that the board failed to follow its own rules and took action against the Camardas without sufficient evidence.
The couple spent two and a half years trying to resolve the dispute in private, according to their spokesman, Donald Hannaford. But now, the couple says through Hannaford, We will pursue the lawsuit to the end to clear our good name and seek compensation for what we have unjustifiably lost in the interim.
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