A convicted felon barred twice from selling securities, this adviser clings to insurance
What does it take for an insurance agent to lose his license?
It takes a lot of hard work and effort for a financial adviser who sells insurance to lose a state’s permission to hawk products that typically pay the adviser juicy commissions.
Indeed, a broker really has to put his shoulder to the wheel of malfeasance to get a state insurance commissioner to sit up, take notice and say, “Wait just a minute. This guy might not be on the up-and-up. Better take a look!”
Take the case of Ronald D. Morley, who has been barred from selling securities twice: once in 2006 by Maryland, where he is based, and again in 2016 by the Securities and Exchange Commission, for two different schemes. He is also a convicted felon in Kansas.
Despite his questionable background and an ongoing effort by the Maryland Insurance Administration to take away his license, Mr. Morley’s license is deemed “active” on the state website that consumers can use to check whether an insurance salesman has the state’s approval to sell products.
Mr. Morley promotes his insurance experience and background on his LinkedIn profile page, even though Maryland is trying to revoke his license. His current firm is called Client One Marketing.
“Having been in the insurance business for well over two decades, we realize the importance of your hard-earned savings when you retire,” Mr. Morley writes. “Now more than ever it is important to plan for 30 years in retirement with income you cannot ever outlive.”
He also markets himself as having some connection to financial planning: “Allow us to provide a written plan to show you how to accomplish this plan, and we will provide you with a candid second opinion as to whether or not you can lesson [sic] your risks in retirement income planning.”
He goes so far as to assert a connection to Ed Slott, a certified public accountant who is an expert on individual retirement accounts. Mr. Morley’s LinkedIn profile says he’s a member of Mr. Slott’s Elite IRA Advisor Group, a private study group for advisers who work with clients’ IRAs.
Making matters even more confusing for consumers, Mr. Slott’s organization had problems with Mr. Morley’s claim.
“We take great pride in only working with ethical advisers and financial
professionals,” said a spokesperson for Mr. Slott. “Mr. Morley is not a member of Ed Slott’s Elite IRA Advisor Group, and we have contacted him to remove this inaccurate information from his social media profile.”
Nowhere on LinkedIn does Mr. Morley mention that in 2006, Maryland barred him from the securities business for falsely representing to investors that certain investments were safe and secure, even though a few state securities regulators had prohibited the sale of those securities. According to Maryland, he caused financial harm to consumers and agreed to pay restitution.
A decade later, the SEC barred Mr. Morley from working at a broker-dealer or RIA, which means he can’t sell securities. According to the commission, he sold a fraudulent stock offering, Summit Trust Co., to 130 clients. He held the title of independent trust consultant from Summit and earned more than $3 million in commissions from 2008 to 2014.
As part of the matter, Mr. Morley agreed to pay back more than $3.5 million in disgorgement, interest and penalties.
He was also criminally convicted in Kansas in 2018 for securities fraud and related issues but served no jail time. He was given 36 months of probation and ordered to pay back almost $850,000 to clients.
“I do not hold myself out as a registered investment adviser and I have never been one,” Mr. Morley said early Thursday afternoon. When asked whether his business refers clients to financial planners, he declined to comment.
In October, Maryland revoked Mr. Morley’s insurance license, but he has appealed that order, with another hearing to be held at the end of March. That’s why he appears to be an insurance producer in good standing.
In the past, this column has focused on the confusing nature of the various regulatory regimes under which financial advisers work. Among the most vexing issues facing the financial advice industry is that of advisers who are restricted or barred from selling securities, but continue to hold a license to sell insurance.
Mr. Morley’s long, troubled history and background in the financial advice business begs the question: What on earth does it take for an adviser or salesman to lose his license to sell insurance products to consumers?
The National Association of Insurance Commissioners doesn’t have an answer. When asked how an insurance sales agent gets barred, a spokesperson for the NAIC, Alana LaFlore, said I should direct my question to the producer’s home state, in this case Maryland.
The spokesperson for the Maryland Insurance Administration, Craig Ey, forwarded an online page of the Maryland insurance code that lists almost two dozen infractions — from lying on an application for a license to committing insurance fraud — that will get the insurance commission moving to revoke a producer’s license. Mr. Ey offered no other explanation.
According to Maryland’s insurance department, Mr. Morley should lose his license. He “has demonstrated on numerous occasions that he does not meet the standard of trustworthiness and competence required in an insurance producer,” the order from October reads. He “owes millions of dollars to other regulatory authorities and to the victims of his fraudulent conduct, but has failed or refused to pay the money he owes.”
The insurance industry’s failure to act appropriately here not only potentially harms consumers but is a stain on the financial advice industry. Why won’t the insurance industry move more quickly and effectively against sales agents like Mr. Morley?
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