The Certified Financial Planner Board of Standards has imposed an interim suspension on a Knoxville, Tenn.-based advisor for failing to disclose that he received compensation while he solicited and provided investment advice to clients regarding a penny stock offering.

William D. King operated as an unregistered broker during these activities, according to a consent order by the Securities and Exchange Commission. King’s BrokerCheck profile showed that he was registered with IFG Network Securities Inc. in Atlanta from July 15, 1994 to January 26, 2001.

The CFP Board said it acted against King after it learned that he had been barred by the SEC in September for violating the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940.

According to the SEC, from August 2015 through September 2018, King solicited investors on behalf of American Rebel Holdings Inc. (AREB) to make various investments in a penny stock without disclosing compensation he received from the penny stock issuer and the markup he charged clients related to the investments. The shares he received were worth $72,250 at the time, and he retained about $447,000 in shares as fees, the SEC said.

As a fiduciary, King’s failures to disclose constituted a fraudulent omission upon his clients, the SEC said.

The SEC said King solicited investors to invest in AREB by sending money to ABA Rebels LLC (ABA Rebels), and after raising about $600,000, he used the clients’ money to acquire a portion of the AREB shares without disclosing the acquisition price to the clients. In total, through this mark-up, King received $196,875 in the form of AREB shares and an additional $50,000 from clients to purchase shares of AREB, the SEC said, noting that King used the excess shares he had acquired to fulfill the clients’ purchases without disclosing his role as a principal to the transaction or the mark-up.

King solicited clients to purchase convertible notes in AREB that matured in either six months or one year, carried 12% annual interest, and had a conversion feature allowing them to be converted to shares of AREB at $.50 per share, the SEC said. But he failed to disclose that he would retain the interest in the form of AREB shares worth about $250,509, the SEC said.

In addition to being barred by the SEC, King, without admitting or denying the findings, agreed to cease and desist from any violations and future violations of the charged provisions and to pay disgorgement of $519,634, prejudgment interest of $33,388.13 and a civil penalty of $75,000.

The CFP Board’s automatic interim suspension order stipulates that King’s right to use the CFP certification marks is suspended pending CFP Board’s completed investigation and possible further disciplinary proceedings.

An Interim suspension order is a temporary sanction and does not preclude CFP Board from imposing a final sanction. An Interim suspension order will remain in place until the Disciplinary and Ethics Commission or, if an appeal is filed, the Appeals Committee, issues a final order, the board said.