Another Black Eye for a Former NAPFA President
Mark F. Spangler, a former President of the national Association of Personal Financial Advisors (NAPFA), had his home raided by the FBI in a sting operation searching for evidence related to mail, wire and securities fraud, in addition to money laundering, according to Investment News.
The raid by the FBI on September 23, 2011 was conducted in compliance with a search warrant for any and all evidence associated with allegations of securities fraud involving the loss of millions of dollars. Mark Spangler had previously been the President of NAPFA in 1999 and is the owner of The Spangler Group Incorporated. The Spangler firm reportedly managed $106 million according to SEC filings but the firm went into receivership in June 2011. There have been no charges filed against Spangler to date but the investigation indicated that he had made investments in “high-risk private companies”, or startups, without having authority to do so from his clients. Additionally, he had misrepresented the truth by saying the investments were safely in funds holding publicly traded companies, according to the article. A couple of the startup companies invested in were ones in which Spangler had a close business and personal interest. For example, he was the Chairman of Tamarac Incorporated and President of TeraHop Networks Incorporated. Apparently, Spangler was not actively involved with Tamarac, who stated that he got off the board earlier in 2011. According to court documents, TeraHop Networks went bust causing investors to lose over $50 million.
Back in 2009, another President of NAPFA was charged with taking over $1.24 million in kickbacks. James Putman had been president of the fee based advisory organization during the years of 1996 to 1997, when he allegedly took the kickbacks associated with unregistered investment pools. The U.S. Securities and Exchange Commission (SEC) eventually froze all of Putman’s assets and the case is still pending with an SEC receiver.
NAPFA has issued a statement saying that it is not privy to all of the facts surrounding the case and that Mr. Spangler perhaps only misunderstood his clients’ investment objectives and tolerance for risk versus committing any type of securities fraud.