The Washington State Department of Financial Institutions has opened a formal investigation into a one-time financial planner in Spokane recently banned from working in that capacity.
State investigators began contacting the former clients of Ronald W. Hannes at the beginning of March, says Lyn Peters, director of communications for the Olympia-based agency.
The state inquiry is on the heels of the Federal Industry Regulatory Authority’s decision to ban Hannes from acting in the capacity of a financial adviser for the alleged misuse of client funds.
Hannes, who was once affiliated with Woodbury Financial Services Inc., was banned in mid-February by FINRA following his termination at Woodbury at the end of last year.
Hannes’ Seattle-based attorney, Joshua Ferrentino, of Corr Cronin LLP, says he and Hannes decline to comment on the investigation.
A FINRA report states Hannes is accused of collecting money from a client for a life insurance policy that was never paid to the insurer. In another complaint against Hannes, FINRA reported that some of Hannes’ clients told Woodbury they made payments on his credit cards seven years ago.
FINRA, based in Washington, D.C., is an independent, nongovernmental organization that writes and enforces the rules governing registered brokers and broker-dealer firms in the U.S. The organization oversees more than 3,700 brokerage firms, 155,000 branch offices, almost 630,000 registered securities representatives as of last year, says the organization’s website.
Michelle J. Ong, senior director of corporate communications, says FINRA doesn’t comment about pending or concluded investigations of its member representatives beyond documents posted on the organization’s website.
On a FINRA-operated website called BrokerCheck, some of Hannes’ customers alleged last year that they paid off a credit card for him in 2013. Ong wouldn’t say how many customers made the allegation, and the website doesn’t specify.
It was among two types of complaints cited against Hannes last year, according to a FINRA report.
“The firm received notice from a client that funds were paid to the representative for purchase of a life insurance contract that were not forwarded to the life insurance company,” FINRA writes in its report.
BrokerCheck lists a settlement amount reached in the amount of $128,827, but the report doesn’t specify whether Hannes or Woodbury paid the settlement.
On Jan. 7, FINRA staff sent a request to Hannes for documents and information and required the material be produced by Jan. 21.
Through Ferrentino of Corr Cronin, Hannes acknowledged receipt of FINRA’s request but refused to produce the requested information, documents show. The refusal to produce the documents allowed FINRA to issue a ban against Hannes preventing him from acting as a financial advisor.
Hannes first registered with FINRA in September 1986 as an investment company and variable contracts products representative. He was registered as an investment representative with Woodbury from Oct. 27, 1986, to Dec. 31, 1989. He was registered again with the firm from Jan. 30, 1990, to Dec. 31, 1993, and again from Jan. 31, 1994 to Dec. 18, 2019, the date of his termination from Woodbury, according to FINRA documents.
“Hannes does not have any formal disciplinary history with the Securities and Exchange Commission, any self-regulatory organization, or any state securities regulator,” FINRA states in its report.
Woodbury Financial is based in Oakdale, Minnesota. Its website lists a Spokane office, but most of its financial representatives are located in the Midwest and East Coast.
A wealth management firm, Woodbury Financial was founded in 1968 and today has 1,600 advisers. The firm’s website says it has a little more than $60 billion in managed assets, says the company’s website.
Subscribe today to our free E-Newsletters!SUBSCRIBE