When Theresa Stone and her husband, Shawn Waked, decided to buy a financial planning practice in 2019, they were perhaps in the best possible position to make it a success.

Stone had been working for Raymond James Financial Services as a dually registered advisor since 2008 and in a business development role since 2013. And Waked, who joined Raymond James in 2017, had had a full career as a certified financial planner and expert in behavioral finance.

So the acquisition of Summit Investment Group, a Raymond James affiliate in Santa Fe, N.M., with roughly $120 million in assets under management, should have been an easy layup.

A $6.8 million Finra arbitration award to Stone and Waked disclosed this week, however, tells a different story.

The initial claim, filed by Stone and Waked in January 2021, accused the former owner of Summit, Jane Terry, and two employees, Kathleen Alexandrea Kerr and Timothy James Rivera, of fraud/fraudulent inducement, negligent misrepresentation, breach of contract, breach of the covenant of good faith and fair dealing, solicitation of clients, misappropriation of trade secrets, interference with contractual relations and civil conspiracy, all in relation to the sale of the financial planning practice.

A March 2021 counterclaim filed by Terry, Kerr and Rivera as a group alleged breach of contract, negligent misrepresentation and hostile work environment. Separately, Terry also accused Stone and Waked of conversion and fraudulent misrepresentation, and Kerr and Rivera alleged intentional misrepresentation and constructive discharge. An additional claim of sexual harassment filed by Kerr was later withdrawn.

The award denied the counterclaim.

None of the involved parties nor their attorneys returned calls to discuss the case, although Stone texted to say that she and her husband would not be commenting at this time. 

According to BrokerCheck, Terry entered the brokerage industry in 1982 with a position at E. F. Hutton. For her last employment, she and Summit (which she had founded in 1989, according to a profile written by her alma mater, Eastern New Mexico University) joined Raymond James in 1998, taking space at 130 Camino Escondido in Santa Fe in 2005. At one point, she had as many as 20 employees, according to an online directory listing, and the firm serviced high-net-worth clients.

Kerr, who remains dually registered, joined the office in 2005, and Rivera, also dually registered, joined in 2016, according to BrokerCheck.

Theresa Stone’s LinkedIn page describes her current position as a recruiting professional for financial advisors at Raymond James with a coverage area of Nebraska, Kansas, Arkansas, Louisiana, South Texas and New Mexico, although she and her husband reside in St. Petersburg, Fla. In her bio, Stone notes that she and her husband purchased Summit in April 2019.

In August of that year, Terry dropped her registrations, and in September, Kerr and Rivera left the firm and severed their relationship with Raymond James, according to BrokerCheck.

But just two months later, in November 2019, Kerr and Rivera reappeared as managing partners under a new banner, Stonemark Investment Group, and as affiliates of Securities America. Stonemark’s address remains 130 Camino Escondido.

Whatever happened between April and September, the three-person Finra panel considered the following award breakdown appropriate:

Laurence Landsman, a founder at Chicago’s Landsman Saldinger Carroll, a law firm specializing in representing brokers and advisors in all areas of career transition, including practice sales, reviewed the Finra award and said while he has no direct knowledge of the case, there are aspects to the award that speak volumes.

“Those compensatory damages are pretty significant, so this was an active, revenue-generating practice,” he said. “It’s a significant award that reflects the wrongdoing.”

Especially notable is the presence of damages for emotional distress, which is highly unusual, Landsman said. “When you’re talking about the sale of a practice, it’s about contracts,” he said. “To get emotional distress damages, the wrongdoing has to almost have been personal in some way. That indicates to me there’s more going on than you can glean from the award alone.”

The panel also gave Terry, Kerr and Rivera two weeks to return to Stone and Waked all information, materials, documents, files, data, etc., relating to the business. All former Summit web addresses now point to Maestro Financial Partners, Waked’s current advisory firm in St. Petersburg.