The Securities and Exchange Commission has barred a New Hampshire investment advisor for allegedly misusing leveraged and inverse ETFs and misleading his clients.
Nicholas Rowe, 57, of Hollis, N.H., the former owner of registered investment advisor Focus Capital Wealth Management, agreed to settle the SEC’s charges in an administrative proceeding.
The charges follow parallel proceedings from New Hampshire state regulators, who also barred Rowe from the securities industry.
Rowe and Focus Capital allegedly used leveraged and inverse ETFs in a manner unsuitable for their clients.
New Hampshire also alleged that Rowe made misrepresentations regarding the fees to be charged and regarding his qualifications as an investment advisor, violating laws prohibiting advisors from engaging in unethical practices.
Focus Capital was registered with the SEC from 2005 to 2012, after which time it was registered with New Hampshire.
In 2011, New Hampshire launched an investigation into Focus’s investment practices, which allegedly placed assets from elderly investors with low risk tolerances into unsuitable strategies without informing the clients. Those clients included three widows between the ages of 60 and 74 who allegedly lost nearly $1.9 million combined.
The state revoked Focus’s registration in March 2013 and ordered Rowe and the firm to pay $20,000 in fines and investigation costs in addition to more than $2 million in restitution to their investors.
Investor claims against Rowe and Focus alleging negligence and civil fraud were brought into Finra arbitration, where one ruling against the RIA imposed $1.8 million in restitution payments.