ALLEGATIONS of financial fraud have, unfortunately, become all too common in this economic downturn. But one of the latest seems worth particular note since it involves a former national (chairman) of the National Association of Personal Financial Advisors, who pushed the group to adopt a policy that requires members to act in the best (interests) of their clients and to disclose any conflicts of interest.
Now, the former chairman, Mark F. Spangler, an investment adviser in Seattle, is being accused by the federal (authorities) of committing securities fraud when he put his clients’ money into investments in private companies without their consent. In an affidavit to support a search (warrant) of Mr. Spangler’s home, a Federal Bureau of Investigation agent claimed that he also created false statements and failed to (disclose) that he had an interest in two of the companies in which he invested clients’ money. One of those companies went out of business this year.
Here’s a little background: The (investments) at issue are so-called private placements, meant for sophisticated investors who are aware that they could make a lot of money but also that they could lose it all. In this case, the F.B.I. (estimated) losses of at least $46 million out of the $106 million that Mr. Spangler managed.
Ronald J. Friedman, the attorney representing Mr. Spangler, said his client had been cooperating with the (federal) investigation and had not been charged. He declined to give Mr. Spangler’s version of what happened or make him available for comment. A court-appointed receiver has been named to try to recover whatever assets remain.