On Jul. 1, SEC charged advisor with defrauding retail customers.
- Fieldstone Financial Management Group and principal Kristofor Behn, defrauded retail clients by failing to disclose conflicts of interest on their recommendations.
Charges
- 2014-2016, approximately 40 retail clients of Behn and Fieldstone invested over
$7mn in Aequitas securities, who were subject of a previous enforcement action. - Defendants did not disclose Aequitas had provided Fieldstone with $1.5mn loan
and access to $2mn line of credit, creating an incentive to recommend Aequitas. - Defendants made false claims and omissions in reports, stated that repayment
terms of loan from Aequitas was not contingent on clients investing in Aequitas. - In addition, defendants fraudulently induced client to invest $1mn in Fieldstone.
- Within days of Fieldstone receiving $1mn, Behn used about $500k to pay his
personal taxes and make other payments to himself or for his personal benefit.
Settlement
- Fieldstone and Behn fined on joint-and-several basis, disgorgement and interest
of $1mn and fine of $275k, all of which will be distributed to affected investors.
