An unregistered investment adviser has been barred by the Maryland attorney general's office for "dishonest and unethical trade practices" that included selling unregistered securities by fraudulent means.
According to the
Securities Commissioner of Maryland's order, Perry Santillo Jr., founder and chief executive of High Point Wealth Management, is guilty of soliciting business from former clients of an investment advisory business he acquired last year from its
barred owner, Philip Rousseaux.
Mr. Santillo, who could not be reached for comment, defaulted his case by failing to appear to defend himself. He faces nearly $3.5 million in civil penalties and fines, and he has until April 29 to appeal the ruling.
Court records show Mr. Santillo acquired Everest Investment Advisors after its owner, Mr. Rousseaux, had his registration as an investment adviser revoked in March for deceptive securities sales practices.
Mr. Rousseaux, who recruited clients through his popular infomercials featuring "The Money Guys," is
appealing the ruling that barred him and his advisory firm, and included a fine of $255,000.
Mr. Rousseaux could not be reached for comment. His attorney, Alex Brown of Shapiro Sher, did not respond to a request for comment.
According to the order barring Mr. Santillo, in November he began soliciting former Everest clients via emails explaining how the "transition works in regards to your investments."
The emails, which included a video presentation, cited a planning process custom-tailored to individual investors' needs, according to the order.
During follow-up face-to-face meetings held in the same Towson, Md., offices formerly occupied by Everest and now occupied by High Point, the clients were advised to sell securities and transfer the assets to a self-directed individual retirement account. Clients were also advised to sell their annuities.
Between November and January, the order said, Mr. Santillo and High Point advised at least 99 investors to sell more than $6 million worth of securities and transfer the funds to a self-directed IRA.
Once the money was in the self-directed IRAs, Mr. Santillo recommended that the clients invest in unsecured promissory notes that were used to finance Mr. Santillo's other companies, according to the order.
"It looks like there is a pot of clients that have been susceptible to a questionable pitch, and that concern is that those investors are being taken advantage of twice," said Andrew Stoltmann, a securities attorney and president of the Public Investors Arbitration Bar Association.
