Judge bans adviser accused of scamming 96-year-old client

A registered investment adviser who allegedly stole $1.8 million from clients was barred from the advisory industry by an administrative-law judge. Steven W. Salutric, 51, who ran Results One Financial LLC, failed to file response papers or appear at a hearing this month to defend himself against charges by the Securities and Exchange Commission that he operated a Ponzi scheme and made unauthorized withdrawals from client accounts held in custody with Charles Schwab & Co. Inc. The fraud included stealing more than $400,000 from a 96-year-old client who lives in a nursing home and suffers from dementia, the SEC alleged. It said that Mr. Salutric forged client signatures to withdraw funds from their Schwab accounts, using the proceeds to pay off other clients and for his personal use. He allegedly donated $321,000 of the funds to a church where he served as treasurer, paid about $610,000 to a company that distributed a movie he co-produced (“Madison,” starring Jim Caviezel) and invested about $259,000 in two restaurants near his residence. A U.S. district court judge in the Northern District of Illinois appointed a receiver for Mr. Salutric's assets in February and last month permanently enjoined him from violating certain sections of the Securities Exchange Act and the Investment Advisers Act. Results One, which oversaw about $129.6 million in 794 client accounts, according to its last Form ADV filing with the SEC last October, is no longer registered with the commission, and its phone number has been disconnected. The ADV form said that the firm's principals also were involved in a separate insurance sales business. Mr. Salutric couldn't be reached for comment. Schwab this year imposed tighter wire authentication processes on financial advisers' requests to transfer funds from client accounts, though Alison Wertheim, a company spokeswoman at the time, said in February that the changes were planned well before the Salutric case came to light. Schwab in January terminated its relationship with Results One, and she said that it was working with the SEC and the court-appointed receiver to help investors recover their money. Administrative-law judges are independent of the SEC but conduct hearings and rule on allegations of securities law violations initiated primarily by the commission's enforcement division. Their decisions can be appealed to the SEC's five commissioners, and their actions — affirming, reversing, modifying or remanding for further proceedings — can be taken to a U.S. court of appeals. Chief Administrative Law Judge Brenda Murray wrote in a Sept. 10 court document that she accepted the SEC's allegations as true because Mr. Salutric failed to respond to the charges. “I order, pursuant to Section 203(f) of the Investment Advisers Act of 1940, that Steven W. Salutric is barred from association with any investment adviser,” she wrote.