Products June 22, 2012

Jefferson National Teams With CAPTRUST to Launch Investment Strategies

Five dynamic allocation models powered by CAPTRUST research were introduced by Jefferson National.
Reported by

The tax-deferred investments are available through registered investment advisers (RIAs) or broker/dealers in Jefferson National’s Monument Advisor flat-fee variable annuity. CAPTRUST  designed the dynamic asset‑allocation models to address investors’ financial goals and risk tolerance. The models seek to generate superior risk-adjusted returns through portfolio construction, tactical asset allocation and investment manager selection.

Integrating these models in a flat-fee variable annuity gives independent RIAs and fee-based advisers access to institutional-quality research, asset-allocation strategies and proprietary manager selection from CAPTRUST.

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The asset-allocation models make use of Jefferson National’s lineup of more than 380 tax-deferred funds across a range of categories, including alternative investments, fixed income, asset allocation and international equity. The flat-fee variable annuity has access to more than 46 money managers.

Laurence Greenberg, president of Jefferson National, said the company’s aim is to help RIAs and fee-based advisers balance practice management challenges and add value for clients in a tough market.

According to Fielding Miller, CAPTRUST’s chief executive, combining the advisory firm’s proprietary asset allocation and investment manager research with Jefferson’s flat-fee annuity creates a practical solution for investors.

Compliance June 21, 2012

SEC Charges Massachusetts Adviser With Fraud

Gary J. Martel, of Chelsea, Massachusetts, was charged by the Securities and Exchange Commission (SEC) with defrauding investors of $1.6 million. His assets were also frozen.
Reported by

The complaint, filed in federal district court on June 19, alleges that from at least 2006 to the present, Martel—who conducted business under multiple names including Martel Financial Group and MFG Funding—defrauded at least 12 investors in Massachusetts, Vermont and Florida of no less than $1.6 million, and likely obtained significantly more from other investors. Today, with Martel’s consent, a federal judge entered an order freezing Martel’s assets and prohibiting him from continuing to violate the anti-fraud provisions of the federal securities laws.

Martel told investors—many of them retirees looking for a safe investment to generate reliable income—that he would place their money in “pass-through bonds” or other purported fixed-income or pooled-investment products. He assured clients the investments were safe, according to the charges.

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Martel created account statements showing interest earned and sometimes made small distributions of supposed interest, which encouraged investors to give him more money to invest, the complaint alleged. It also stated that offered other fraudulent investments.

 

In March, according to the complaint, Martel solicited investments in a Facebook investment pool, claiming it would allow small investors to “own a piece” of the Facebook initial public offering. In fact, the investments he offered were fictitious and no longer exist. He transferred funds out of the bank account, where investor funds were deposited, to bank accounts he maintained for his businesses, the complaint alleged.

It also said that Martel violated sections of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940.

In its action, the Commission seeks the entry of a permanent injunction against Martel, disgorgement of ill-gotten gains plus pre-judgment interest, and the imposition of civil monetary penalties. In addition to freezing his assets and prohibiting him from violations of anti-fraud provisions of the federal securities laws, Martel is prohibited from soliciting, accepting, or depositing any money from investors and from altering or destroying any relevant documents, and also requires him to provide an accounting of their assets and uses of investor funds.

The Massachusetts Securities Division notified the SEC of Martel’s conduct and investor losses, and last week filed an action against Martel based on the same conduct.

The SEC’s statement and court documents are here.  

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