Regulators in Utah have dropped charges of fraud and apologized for dinging the reputation of two First Western Advisors brokers, according to the Salt Lake Tribune. The Utah Securities Division last week said First Western brokers Brian G. Kasteler and David A. Russon had, with other brokers, collected tens of thousands of dollars in commissions by selling inappropriate class shares of mutual funds to clients. The state named nine First Western investors with more than $20.6 million under management with the firm as victims of a scheme. Kasteler and Russon presented regulators with evidence of the performance of the Class B shares. “They listened too late, but they finally listened, and we’re grateful for their expression of regret,” Russon said. Securities Division Director of Licensing George Robison admitted that no client had complained to regulators, and that investigators did not ask First Western about the concerns before filing charges. The data came from the federal Securities and Exchange Commission, which conducted a periodic brokerage audit. In exchange for dropping the charges, state regulators required the brokers to contact the clients and offer them the option to convert their more expensive Class B shares to Class A. “We’ve already done that, and none of our clients have taken us up on that offer,” Russon said. The division still has charges pending against two other advisors and First Western. The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.
Insight and analysis into the management, marketing, operations and technology of the asset management industry.
Have an account? Sign In