Advisor mom’s son used her password to log into clients’ accounts, sell deal with conflicts, according to Washington state

A mother and son team of financial advisors in the Seattle area ran afoul of Washington state regulators recently when it was revealed the son in 2021 logged into accounts of his mother’s clients and sold interests in a holding company that bought a winery. 

Candace Swayne owns WMS Wealth Management, a registered investment advisor with $46.8 million in client assets, and Willam Madison “Bill” Swayne III is her son and was registered with a broker-dealer before joining WMS Wealth Management in April 2022 as an investment advisor rep.

According to an October settlement with Washington State’s Department of Financial Institutions, Securities Division, starting in January 2021, Bill Swayne, before being registered with the RIA, used Candace Swayne’s “login credentials to manage WMS Wealth’s client accounts without being registered as an investment adviser representative.”

That June WMS Wealth’s custodian, TD Ameritrade, terminated its relationship with WMS Wealth due to Bill Swayne’s use of his mother's login credentials, according to the order.

“Between January of 2021 and April of 2022, [Bill] Swayne III acted as an unregistered investment adviser when he managed client accounts on the adviser’s platform,” according to the consent order.

Bill Swayne was registered with a broker-dealer, Integrity Brokerage, to sell interests in Chelan Ridge Holdings, which eventually purchased a winery.

“During this same period, [Bill] Swayne III failed to disclose his material conflict of interest when raising $1.25 million in investments in Chelan Ridge Holdings from eleven WMS Wealth advisory clients,” according to the order. “At all relevant times, Candace Swayne, as the sole owner of WMS Wealth, failed to supervise [Bill] Swayne III.”

Reached by phone on Friday, Bill Swayne said the consent order was a result of a licensing and trading technicalities, made in a time of the Covid epidemic.

Candace Swayne “was having online access problems, and we provided documents about that, as well as trading reports, but because I was assisting her logging in they could not reconcile that,” Bill Swaye said.

“The state comes down on you in years when you make 40% returns for clients,” he said. “There were no losses or damages.”

Bill Swayne also noted that regulators made no allegations of fraud in the cease and desist order, which levied a $50,000 fine against the mother and son as well as a $5,000 payment for costs of the investigation. The two also agreed to pay fees back to investors.