Ken Fisher and Dain Stokes have a bad week

Compliance Software Future
The Future of Compliance
October 9, 2019
FINRA 2019 Report & Findings
October 23, 2019

It is not exactly an apples to apples comparison, but sometimes big financial gurus and small investment advisors can both have really bad weeks.

Early last week, Sabrina Willmer of Bloomberg reported that Ken Fisher of Fisher Investments shocked his audience at the Tiburon Strategic Advisors event with sexist and off-color remarks. He has been roundly rebuked for his “me too” moment and shocked by the industry’s and markets’ reactions. I’m an “easy guy to dislike,” he says because he manages so much money.  

In an emailed statement to HuffPost responding to a video of Fisher’s speech posted on Twitter by Alex Chalekian, head of Lake Avenue Financial, Fisher wrote: “While I said the words he cited I don’t think he heard me correctly and clearly misconstrued my meaning and certainly my intended meaning. Most of his slant is ‘gotcha’ wrong in my view. To the extent he and any others were offended, I apologize truly and sincerely.” 

According to Bloomberg, the revelations are bringing a different kind of attention to Fisher and the Camas, WA-based firm that he built into a powerhouse, with offices across the U.S. and Europe. Founded in 1979, Fisher Investments has become a key money manager for 175 institutional clients, as well as high-net-worth individuals. The firm’s investors include pensions for teachers and other public employees in Georgia, Iowa, Mississippi, and Ohio, none of whom had spoken out to date about the incident when contacted by Bloomberg News.

A few days later, InvestmentNews reported that a broker fired by LPL Financial in August is facing an injunction and asset freeze from New Hampshire’s Bureau of Securities Regulation. The Bureau alleges the broker, Dain F. Stokes, solicited two clients to invest more than half a million dollars in a fake African charity project in which he claimed Taylor Swift was personally involved. According to InvestmentNews Reporter Bruce Kelly, the New Hampshire bureau suspended Mr. Stokes’ license on Aug. 26, and LPL later fired him.

Apparently, in early August, a client of Stokes’ filed a police report alleging fraud related to a $201,000 investment project that the broker had classified as confidential. The client provided copies of canceled checks, unsecured promissory notes and text messages to the police.  Stokes is alleged to have solicited a total of at least $576,000 from two clients to purportedly invest in the African charity and claimed their investments would generate a 20 percent return. Mr. Stokes also allegedly touted the involvement of other notable people, including Bill Gates, in the charity.

According to an LPL spokesperson Jeff Mochal, “Mr. Stokes was terminated on Sept. 12 after we became aware of apparent financial misconduct. We continue to investigate this matter internally and cooperate with ongoing investigations.”

The saga’s unfolding follows the usual pattern. New Hampshire has found no evidence to support Stokes’ claims that the African charity is credible, and it believes he misappropriated investor money by transferring their funds to multiple people and entities across the country while at the same time using some of the investors’ money for personal expenses.”

Mr. Stokes’ assets are frozen, and he was also ordered not to contact clients he solicited in the African charity and not to receive new money from former clients, according to New Hampshire.

How can compliance deal with “loose lips” and fabricating scammers?

The loose lips will likely take care of themselves. Ken Fisher may not say he’s embarrassed, but he did say he did not want to be lumped into the same category as Jeffrey Epstein.

However, when it comes to fabricating scammers, that’s where Patrina can help. For more than 25 years, Patrina has been helping compliance professionals like you keep track of “bad apples,” and stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective, designated third-party services, our comprehensive 8-module compliance solution, and compliant data capture & file storage, and records archiving specifically designed for the financial services community. Be smart. Be covered.Let’s talk.  

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