Troubled investment adviser Adam Kuettel has added a new problem to his list: the Arkansas Securities Department.
As you may have heard, the ASD last week suspended the registration of Kuettel as an investment adviser representative and also suspended the company that he founded, Kuettel Capital LLC of Bentonville, as an investment adviser, over allegations that include securities fraud and unsuitable recommendations.
Kuettel has been sued by angry clients who said their investments with Kuettel Capital lost millions of dollars in value. The clients said in several lawsuits filed since April that Kuettel and his company parked their money in risky investments when they requested safer ones.
The ASD investigated Kuettel and his company and discovered “many irregularities in the operation of” Kuettel Capital, according to the 11-page order filed June 22 by Arkansas Securities Commissioner Eric Munson.
Kuettel and his firm touted that they give each client investment recommendations based on their specific circumstances, goals and risk tolerance, the order said.
But they didn’t, the order said. “Instead, many accounts had identical trades in them and many of those trades did not match the clients’ stated goals and risk tolerances set forth on the new account forms,” the order said.
The order also accused Kuettel of forging his clients’ signatures on account forms to make the trades.
And even though Kuettel said he wouldn’t make any purchases of penny stocks, which are susceptible to wild swings in prices, he did that too, the order said. And, of course, several of the stocks’ prices tanked, according to the filing.
“Many of his clients sustained large losses,” the order said.
A husband and wife, who aren’t identified in the order, opened a family revocable trust in March 2015 with $2.1 million. The couple wanted to grow the assets to use in retirement. But from January 2019 to March 2020, the account value had fallen by about 60%, the order said.
The ASD also found that Kuettel Capital’s website promoted Kuettel as an accredited portfolio management adviser, which is a certification awarded by the College for Financial Planning. But “the website of the College for Financial Planning shows that he has no such certification,” the order said.
Kuettel and Kuettel Capital can request a hearing on the order. But if they don’t do it within 30 days of receiving the filing, the order will remain in place as a final order.
Kuettel didn’t immediately return a message left on his cellphone.
More Legal Issues
Oh, and in addition to the pending lawsuits and the Arkansas Securities Department order, Kuettel also is facing criminal charges in Benton County Circuit Court.
On June 12, the 36-year-old was charged with felony aggravated assault on a family or household member stemming from an alleged incident on March 30, according to the criminal information sheet.
The filing said that Kuettel displayed “a firearm in a manner that created a substantial danger of death or serious physical injury to Lauren Shipman,” Kuettel’s fiancée.
He pleaded not guilty.
Meanwhile, several lawsuits against Kuettel Capital are in various stages in Benton County Circuit Court.
In two of the suits, Kuettel Capital’s attorney, Roger Butler Jr. of Tulsa, denied the allegation of wrongdoing and said the disputes should be sent to arbitration.
Two other lawsuits against Kuettel Capital have resulted in default judgments because the firm didn’t file answers in the complaints. In those cases, Kuettel and his attorney have asked to set aside the default judgments so the company can file responses.
Attached to the motion, filed by Kuettel Capital’s attorney, is an affidavit from Adam Kuettel.
He said that between April 3 and May 20 he was in Alabama in an in-patient rehabilitation program for a substance abuse disorder. And he said he was not notified about the complaints that led to the default judgments.
He also defended the firm, saying the plaintiffs “understood the risks associated with their investment portfolio and understood that their portfolio was heavily invested in oil futures. When the markets declined earlier this year, in particular, the oil futures markets, the value of the … plaintiffs’ investment portfolios declined as well.”