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Securities News Releases
Thursday, May 04, 2006
Contact: Stacie Temple, (573) 526-5076
Contact: Mike Seitz, (573) 526-0949
Carnahan Orders Kansas Agent To Stop Unethical Practices
Jefferson City, Missouri -- Secretary of State Robin Carnahan's Commissioner of Securities Matt Kitzi issued a Cease and Desist Order last week against James Norris Holland, Jr. of Lawrence, Kansas and his company Solomon James Financial of Baldwin City, Kansas.
The order alleges that Holland, while a broker-dealer agent with Iowa-based Berthel, Fisher & Company Financial Services, Inc., defrauded his clients by acting dishonestly and unethically when recommending investments to them. Berthel Fisher was not named as a respondent in the matter.
The order also states that Holland acquired many of his clients by approaching current and retired employees of Hallmark Cards, Inc. of Kansas City, through seminars and referrals from other Hallmark retirees and that he recommended unsuitable products to them. Specifically, Holland persuaded his clients to trade their mutual funds for variable annuities and failed to tell them that these variable annuities contained higher fees, locked up their money for years, and paid him larger commissions.
Additionally, the order alleges that Holland made fraudulent statements to his Hallmark clients when attempting to sell them stock in Solomon James Sports, Inc., an athlete representation company founded by Holland. He also failed to properly register the securities with the state of Missouri.
"It is disheartening to think that a registered investment representative would use such deceitful, dishonest measures to defraud Missourians out of their hard-earned money," said Carnahan. "To avoid these unfortunate situations, I encourage all investors to protect themselves and make sure they understand all risks, fees and commissions before they invest," said Carnahan.
According to the order, Holland generated over $150,000 in commissions from the sale of variable annuities to eight Missouri residents in 2004. In 2005, Holland had approximately eighty customers, many of whom were Hallmark retirees and their families. In addition, Holland is alleged to have secured over $80,000 in investments from Missouri residents in his sports agency.
In addition to ordering Holland to cease and desist unlawful activities and the sale of securities in Solomon James Sports, Kitzi's order refers the matter to the Attorney General's office for a revocation action on Holland's registration.
The Securities Division's investigation of Holland's activities has been in cooperation with the Missouri Department of Insurance, which last month filed documents seeking revocation of Holland's license with that Department. For more information regarding investments and fraud protection, or for information regarding a company or representative, please call the toll free investor hotline at 1-800-721-7996 or visit the Secretary of State's Web site at http://www.sos.mo.gov/securities.