The SEC has barred Matthew Walker, a managing partner and chief compliance officer at Pinnacle Plus Wealth Management in Kansas, from associating with any entity in the industry or with penny stock offerings for five years.
In its original complaint filed a year ago, the SEC had alleged that Walker, who had once been a registered broker and investment advisor, let those registrations lapse yet from July 2017 to June 2018 offered and sold 1 Global Capital securities, which were also unregistered, to investors.
Walker could not be reached for comment by press time.
“The complaint alleged that Walker solicited investors to purchase 1 Global securities; advised investors about the merits of the investments; and received commissions of approximately $393,000 that were transaction-based compensation for his sales of 1 Global securities,” yesterday’s SEC filing stated. Prior to his time at Pinnacle Plus, Walker had worked at MML Investors from 2004 to 2008, and at Lincoln Financial Securities for two months in 2009, according to BrokerCheck.
According to the SmartAdvisorMatch website, Pinnacle Plus had $8.1 million in assets under management and 113 accounts. The firm had been registered as a broker-dealer in Kansas, Colorado, Louisiana and Missouri, but all those registrations were terminated by June 2019, seemingly all for the same reason.
In early 2019, the Idaho Department of Finance alleged that Walker and Pinnacle sold securities without being registered as a broker-dealer and employed agents who were not registered. That case resulted in a $5,000 fine and $13,423 in disgorgement. Also in early 2019, the Colorado Division of Securities made the same allegations, issued a cease and desist order and withdrew Pinnacle Plus’s license.
Walker’s case before Kansas resolved on Oct 14 with Walker paying a $40,000 fine, according to BrokerCheck.
According to the SEC, Walker had not been acting alone. Two other Pinnacle Plus advisors, Roger Dobrovodsky and Robert Todd Seth, worked with him and together they collectively sold more than $21 million in the unregistered securities.
“The defendants marketed 1 Global securities to investors as a safe alternative to the stock market and reaped hundreds of thousands of dollars in commissions on their sales even though they were not registered as broker-dealers or associated with registered broker-dealers,” the SEC filing said.
Dobrovodsky settled on disgorgement of $317,690 with prejudgment interest of $32,038 and a $50,000 penalty, the SEC said. Seth also settled on a bar with the disgorgement, prejudgment interest and penalty amounts to be decided later.