March 29–FORT WORTH — The Texas State Securities Board is revoking the registration of a Fort Worth investment adviser after an investigation found he engaged in fraudulent practices and sold securities without being properly registered.
James Poe was sanctioned by the state board this month after he was found to have sold life settlement investments in which he promised investors a 75 percent return. The life settlements were issued by a company that Poe controlled called SRP-LS200LLC.
Poe’s investment advisory firm, Jim Poe & Associates, was also sanctioned for failing to disclose the excessive fees it was charging its clients, the state board said.
Bob Elder, a spokesman for the securities board, said he could not talk about the how many investors there were or how much money they put into the funds.
James Poe is the host of the Found Money Radio show
Poe, host of the Found Money Radio show, did not return calls seeking comment.
Life settlement contracts are considered risky, complicated financial arrangements in which an investor receives an interest in the death benefits of a third party, the state board said. The benefits are paid to the investor when the third party dies.
Life Partners Holdings out of Waco is the most noteworthy example. Life Partners sold shares in life insurance policies on the elderly and terminally ill, defrauding investors. The company filed for bankruptcy last year after getting hit with a $46 million court judgment on Securities and Exchange Commission charges that it filed false and misleading statements.
In his case, Poe agreed to the punishment this month, waiving his right to appeal, according to state documents. As a result, Poe can’t act as an investment adviser, dealer or agent. His firm, Jim Poe & Associates, will also establish supervisory procedures, preventing his involvement.
In the case, Poe was accused of not detailing to investors in the life settlements all of the associated costs, including a 10 percent commission he paid to himself and another entity he owned, International Alternatives PR, which was a conflict of interest.
A compliance consultant to oversee the firm must be hired within 30 days, the state ordered.
In the case, Poe was accused of not detailing to investors all the associated costs in the life settlements, including a 10 percent commission he paid to himself and another entity he owned, International Alternatives PR, which was a conflict of interest.
International Alternatives took 20 percent of the funds Poe raised from investors.
Poe, as an unregistered dealer, also sold life settlement investments from July 2011 to 2015. He took the money to buy the life insurance policies and to pay the premiums for the estimated life expectancies of the individual, plus two years.
He sold the investments as an agent of Fox Financial Management, but the money went to his own firm. During that time he also was not a registered dealer.
The charges against Jim Poe & Associates stem from three funds that he and his firm managed, which charged “nonqualified clients,” those who didn’t meet certain minimum financial requirements, an annual management fee up to 10 percent. State rules require that a registered adviser charging more than 3 percent inform the investor they are doing so.
In the past five years, the state board has revoked the registration of nine investment advisers. The total number of administrative actions since 2011 is 124, including suspensions, fines and reprimands, according to Elder, the agency spokesman.
Max B. Baker: 817-390-7714, @MaxbakerBB
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