FOR IMMEDIATE RELEASE
Mar 5 2015
Contact: Stephanie Fleming, (573) 526-0949
Kander Secures More Than $500,000 for Wronged Missouri Investors
Jefferson City, Mo. — Secretary of State Jason Kander today announced he has secured $500,000 in restitution and $50,000 in fines from Tennessee-based Securities Service Network, Inc. and SSN Advisory, Inc. (SSN Services). The agreement with SSN Services stems from the companies’ oversight of a St. Louis-based investment adviser representative, Dale Isaak.
The consent order, signed between officials in Kander’s office and SSN Services, alleges SSN Services failed to properly supervise the unsuitable investment recommendations made by Isaak to clients.
"My goal is to make Missourians whole when they have been wronged," Kander said. "I’m pleased we will be able to return this money to Missourians so they can move on with their lives and recoup their savings."
The order alleges Isaak, an agent and investment adviser representative with SSN Services until 2013, used information from a paid-subscription newsletter (the Sherman newsletter) to market-time the trading of nontraditional inverse exchange traded funds (ETFs) in client accounts. Inverse ETFs are complex, risky investment products and are often touted as a way to bet against the market.
An investigation by Kander’s office revealed Isaak invested more than 90 percent of at least 16 clients’ funds in inverse ETFs without adequately disclosing to clients the risks associated with this trading strategy. The order alleges that SSN Services was aware of Isaak’s use of the Sherman newsletter’s strategies, knew that Isaak was trading risky ETFs in his elderly clients’ accounts and that SSN Services failed to contact the clients to ensure they understood the risks associated with the investments recommended by Isaak. Further, the investigation found that neither Isaak nor SSN Services fully understood the investment strategy used by Isaak.
Along with Kander’s office’s settlement, SSN Services settled with some of these clients during the investigation by the Securities Division.
"I encourage Missourians to be aware of the risks associated with any investment recommendations and to always call my office before investing," Kander said. "Understanding the risks before turning over your hard-earned money is the best way to protect your savings."
For more information, visit www.MissouriSafeSavings.com or call 1-800-721-7996.
Visit www.sos.mo.gov to learn more about the Office of the Missouri Secretary of State.