Steve Kiefer in More Hot Water As Regulators Say He Misled Clients

by Gwen Moritz  on Wednesday, Jun. 30, 2010 12:56 pm  

Steve Kiefer, a host of financial advice shows on both radio and television, as seen in a screencap from one of his shows on YouTube.

Little Rock investment adviser Steve Kiefer and his Apple Tree Asset Management Inc. have been banned from business in Arkansas for 21 months after state securities regulators determined that Keifer had misled clients as to the status of his business and their accounts.

Arkansas Securities Commissioner Heath Abshure entered a consent order (PDF) with Kiefer and Apple Tree on Wednesday. It follows a consent order in December in which Kiefer agreed to a $50,000 fine for steering clients into mutual fund investments that maximized Kiefer's commission while reducing the client's returns.

According to the new order, Kiefer had on-again, off-again registration as an investment adviser in Arkansas during the weeks after the first consent order. On Jan. 7, he terminated his registration as a representative of Apple Tree, then reinstated it on Jan. 25, and then terminated it again on March 31. 

Between Jan. 7 and Jan. 20, he allegedly executed transactions in customer accounts held by Charles Schwab & Co. Inc. even though he was not properly registered with the state.

On Jan. 21, Schwab terminated its relationship with Kiefer and Apple Tree. The next day, Kiefer mailed a letter to his customers saying that he had lined up another adviser to help him manage the accounts.

"You have either received a letter from Schwab or will get one that says I am terminated from them," Kiefer wrote to clients. "Don't Panic! This just means I am under [the other representative's] number so we don't have any confusion about how to look up accounts. Just sit tight and don't do anything until you get a document from us to sign to move you over to the new company I am now with."

In fact, the Arkansas Securities Department's investigation showed there was no agreement with another representative that that time "but only preliminary discussions with an investment adviser and representative about purchasing Kiefer's business." This, the order says, was a willful violation of state securities law in that the representations made in the letter were misleading.

 

 

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