An arbitration panel has ordered an ex-registered rep in the Iowa and Texas offices of CFD Investments to pay $5.7 million in penalties to a dozen former clients who said he urged them to liquidate their annuities and invest their money in a cancer treatment business he controlled.

On Friday, the Financial Industry Regulatory Authority ordered Dana Bruce Vietor to pay $4,275,177 in total damages to 12 ex-clients, as well as $1,425,058 in attorney’s fees and $21,351 in costs. Vietor was also liable to each of the claimants for $800 in Finra filing fees.

The regulator had already barred Vietor in March 2020.

At the hearing, the claimants in the filing had asked for $20 million in compensatory and punitive damages from Vietor and two other parties: his daughter Ashley Vietor (also known as Ashley Bolson) and their broker-dealer, CFD Investments.

In bringing the claim, the ex-clients accused the Vietors and CFD of fraud (for nondisclosure), breach of contract, negligence, misrepresentation and breach of fiduciary duty, as well as failure to supervise and violation of the Iowa Securities Act.

“The causes of action,” said Finra in its arbitration finding, “relate to the [the claimants’] allegations that as part of a cancer treatment scheme, [Dana] Vietor represented that claimants would make profits from services provided to cancer patients by buying a building to house cancer treatment and other equipment, but D. Vietor and CFD never provided them with financial information after they surrendered annuities (some with hefty surrender charges) based on D. Vietor’s advice to place their funds in LLC notes.”

Matthew M. Craft, an attorney at Dutton, Daniels, Hines, Kalkhoff, Cook & Swanson in Waterloo, Iowa, was one of the representatives for the claimants.

According to Craft, Vietor is a financial advisor based in Independence, Iowa, but he also owned a cancer center in Dallas through an entity called SRS Holdings. As a co-owner, Vietor used a private placement offering to raise money and solicited investments from some of his Iowa financial planning clients, which the clients now claim were unsuitable and extremely risky and that the business was something they weren’t qualified to invest in, Craft said.

“The business started losing millions,” said Craft. “So instead of offering stock or additional stock in the business, [Vietor] began offering clients unsecured promissory notes against the business. They didn’t even get any equity. Not that it would have mattered. He presented it to them as a conservative investment with a guaranteed rate of return of 6%, in some cases 8%. He presented it to them like a bond with no risk but instead it was an unsecured promissory note to a business that was losing millions of dollars.”

Eventually, Craft said, Vietor transferred the assets of the business, including the real estate, at no value to an entity that he and his daughter controlled and the real estate was leased back to the entity his clients invested in.

“At the end of the day, these people in Independence, Iowa, were looking for a conservative investment opportunity but here they are instead investing in a cancer center in Dallas that has no hard assets,” he said.

The claimants also said that the broker-dealer, CFD, took no supervisory action to protect them.

Andrew Shedlock, an attorney with Kutak Rock in Minneapolis who represented Dana and Ashley Vietor in the Finra arbitration, said the following on behalf of his client:

"Mr. Vietor respectfully disagrees with the award and says he did not engage in any wrongdoing as to the claimants and he is reviewing his options to vacate the award."

He also stressed that Ashley Vietor had been cleared of any wrongdoing by Finra. (All the arbitration claims against her were denied.)

The claims against CFD were dismissed. The company made only a brief comment to Financial Advisor magazine about the case.

“We were dismissed in that matter and of course terminated Vietor as soon as we realized the situation was taking place,” said Matthew Bahrenburg, the firm’s chief compliance officer. Dana Vietor left the firm in 2018.

In September, a cross-claim by CFD against Dana Vietor was also dismissed.

Finra barred Dana Vietor in February 2020, and wrote at the time:

“Between January 1, 2014, and November 11, 2018, Vietor engaged in the sale of promissory notes called ‘deposit agreements’ in connection with at least 40 customers totaling more than $3 million. The deposit agreements were unregistered securities, and Vietor engaged in these sales without disclosing and receiving approval from his firms for each individual private securities transaction.” The failures to disclose violated Finra rules, the regulator said.

Dana Vietor has 15 customer disputes among his BrokerCheck profile disclosures (11 of which were marked as “settled,”) and he and Ashley Vietor both worked for two firms that Finra expelled, Oakbridge Financial Services and Allied Beacon Partners.

In one of his BrokerCheck disclosures, CFD said Dana Vietor engaged in private securities transactions without providing information to the firm or seeking its approval, which was cited as a reason for his leaving CFD. In one September 2021 disclosure that announced a customer settlement for $457,000, the customer claimed Vietor sold unregistered securities, that the securities were unsuitable and that Vietor had made fraudulent misrepresentations. Another customer who made similar accusations about Vietor’s sale of unapproved investments, a practice known as “selling away,” settled for $370,000 in June 2021. In a separate complaint, a client noted that Vietor's investments were in promissory notes issued by a company Vietor controlled.

According to his LinkedIn page, Vietor is currently located in Dallas, and is listed as the president of Financial Independence Corp. According to his BrokerCheck page, he is also the chairman of SRS Holdings, which is based in Irving, Texas. Ashley Vietor Bolson is also employed by SRS, according to her BrokerCheck profile.

Ashley Vietor Bolson, is not currently registered, according to BrokerCheck, which said she had previously worked in CFD’s Independence, Iowa, office. She was let go from CFD in 2019 for providing inaccurate information in an internal review, a charge she disputes in her broker comments. She was also part of a $370,000 settlement that alleged the selling away of private placements.