“We’re at the front end of this,” Mr. Friedman said. He added that the allegations had “raised interesting questions about (discretionary) authority in accounts.”
All investors should ask how much they should trust their advisers. But for the wealthy, in particular, the case (underlines) the serious risks of investing in private placement deals. Whether they are set up to invest in real estate, private companies or particular types of securities, private (placements) are created to finance someone’s enterprise. That enterprise is usually undervalued or poised for growth. But it should be a (given) that it may not play out as planned.
Susan John, the current national (chairwoman) of the National Association of Personal Financial Advisors, said she served on the board with Mr. Spangler in the 1990s and had known him for 20 years. The (organization) says it prides itself on transparency.
“He was perhaps one of the (strongest) believers in standards for Napfa,” she said. “So it’s very difficult for me to see how he could have evolved into the person that these allegations would lead you to believe he had become.”
She said Mr. Spangler did a series of (presentations) showing that returns in private placements were better than in public companies for his clients, many of whom had become wealthy from (stock) in Microsoft and Starbucks.
