SEC Cracks Down On San Diego Fee-Only Planner For Alleged Kickbacks
- Created: Friday, 11 November 2011 07:49
Kevin O'Rourke of San Diego firm Western Pacific Capital Management has been charged with steering clients to a private equity offering in exchange for a 10% "success fee."
This does not appear to be an investor-paid sales load, but did represent an undisclosed conflict of interest in the SEC's eyes.
In all, Western Pacific sold about $4.8 million in the non-traded stock.
Compounding the problem, the firm allegedly misrepresented the portfolio of its in-house hedge fund as being far more liquid than it was.
The SEC says Western Pacific advertised its holdings as 75% marketable securities, when in reality transfers into the non-traded private equity vehicle and other illiquid investments crowded out all but 10% of the portfolio.
Touted as one of the best wealth managers in San Diego in recent years, Western Pacific does not appear to have updated its public ADV in two years.
But it does tell us that at least back in 2009, they were operating as a fee-only enterprise, almost entirely providing financial planning and investment advisory services in exchange for a percentage of AUM.
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