The New York Times Covers The Sad Irony Of The Mark Spangler Criminal Allegations

Sunday, October 23, 2011 19:02
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The New York Times Covers The Sad Irony Of The Mark Spangler Criminal Allegations

Tags: compliance | fraud | NAPFA

The New York Times this past weekend wrote about the irony of recent criminal allegations against Mark Spangler, former chairman of the National Association of Personal Financial Advisors who once was a leader in the fight to make financial advisors act in the best interests of their clients.

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"Allegations of financial fraud have, unfortunately, become all too common in this economic downturn," writes The Times’ Paul Sullivan. "But one of the latest seems worth particular note since it involves a former national chairman of the National Association of Personal Financial Advisors, who pushed the group to adopt a policy that requires members to act in the best interests of their clients and to disclose any conflicts of interest.

 

Times reporter Paul Sullivan begins the story by exploring the irony of Spangler, once a champoin of consumer-protection, becoming a fraudster. He then wanders into covering the dangers of private placements.

 

Sullivan interviewed the court-appointed receiver in the case, venture capitalist Kent Johnson. "He said he hoped to recover about 50 percent of the $68 million that he estimated remained, at least on paper," The Times reports. "That would then be distributed to the 80 investors on a pro rata basis." 

 

The $34 million, if split among RIA’s 80 clients, equates to about 33 cents on the dollar, based on Spangler Group Inc.’s Form ADV filed on March 30, 201, which reported assets under management of $106 million.

 

Quotes from current NAPFA Susan John, who has known Spangler for 20 years, reflect the betrayal and disappointment surely felt by many NAPFA members. “He was perhaps one of the strongest believers in standards for NAPFA,” she said. “So it’s very difficult for me to see how he could have evolved into the person that these allegations would lead you to believe he had become.”

 

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