Earlier this month, the Maryland Court of Special Appeals upheld sanctions imposed against Philip Rousseaux. Rousseaux is a former financial adviser based in Towson, Maryland who is known for his “Money Guys” infomercials that aired on local television and radio stations. As a result of the court’s decision, Rousseaux and his firms will remain barred from doing business in Maryland.
In March 2017, the Maryland Securities Division, the state’s security regulator, issued an order revoking Rousseaux’s registration as an investment adviser. The order also imposed a fine of $255,000 against Rousseaux and his businesses, Everest Wealth Management and Everest Investment Advisors. The order was issued by a special assistant attorney general named Sarah McCafferty.
The sanctions came as a result of the Office of Attorney General’s investigation into Rousseaux and his businesses. Rousseaux and his firm allegedly committed rampant securities violations including falsifying client forms and employing misleading sales tactics. In her order sanctioning Rousseaux, special assistant attorney general McCafferty stated that the “unprecedented” volume of violations over many years showed a “striking lack of concern about compliance.”
Rousseaux accused the Attorney General’s office of engaging in a “witch hunt” against him and appealed the order. Rousseaux admitted to the violations but claimed he was unaware that the violations could result in the revocation of his license to sell securities.
Doug Gansler, who served as the attorney general of Maryland from 2007 to 2015, represented Rousseaux in his appeal. Gansler posited that that sanctions were unreasonable given the technical nature of the violations: “He committed technical violations. The penalties seemed to me to be in the opposite of due process.”
In upholding the sanctions against Rousseaux, the Court of Special Appeals agreed that sanctions were appropriate given the high number of violations (more than 1,200). It also noted that the fine represented an average of $209 per violation which was far below the $5,000 permitted by law.
If you believe that you have been misled by a financial advisor or wish to engage the services of a securities lawyer, please call the Costello Law Group at 410-832-800 (or Toll Free 877-418-0003) for a free consultation. Tom Costello of the Costello Law Group has 25 years of experience in stockbroker misconduct and investment fraud.