Wednesday, January 13, 2010

State of Utah Sued by Financial Advisors for Civil Right Violations

A $357 million suit has been filed against the State of Utah for alleged civil rights violations stemming from a four-year campaign by the Utah Division of Securities (DOS) to unfairly pursue over 100 state financial agents beginning in 2003

St. George, UT (Vocus/PRWEB ) January 13, 2010 -- The State of Utah and individuals in its Division of Securities is being sued by Utah financial advisors, case number: 2:2009cv01118, filed December 18, 2009. Named as joint plaintiffs are Henry S. Brock, St. George, Utah and Jay Rice, Salt Lake City, Utah. Defendants include Governor Gary Herbert, Attorney General Mark L. Shurtleff, Department of Commerce Head Francine Giani, and former and current Directors of the Utah Division of Securities (DOS): Wayne Klein, Keith Woodwell, Tony Taggart, and Public Officer George Robinson, and the State of Utah. Brock and Rice allege that the DOS violated their right to redress grievances, peaceful assembly, due process, unreasonable search and seizure, privacy, malicious prosecution, the right to a fair trial or hearing, the right against cruel and unusual punishment enforced by extortion, bribery and witness tampering by the Utah Division of Securities.

Suit Background:
In 2003 the Utah Division of Securities alleged Brock committed five minor rule violations that represented a fine of $2,500 if proven. He defended himself, but after hundreds of thousands in legal fees and other costs, and while not being found at fault on any charge, he settled in April, 2006, simply because it no longer made economic sense to continue. Pursuant to an investigation initiated by the Utah Legislature in 2007, the Legislative Auditor General’s Office issued a critical report ( on July 3, 2008 referencing over 100 similarly treated financial advisors, and the Legislature passed extensive reform legislation in 2009. Nevertheless, since then there has been misleading information about Brock and Rice on the internet. Recently, Brock and Rice retained the services of a former Assistant Attorney General, JoAnn S. Secrist, who considered the evidence compelling enough that she agreed to work on a contingency fee basis. Brock and Rice filed a complaint on December 18, 2009 against the State of Utah in U.S. Federal Court for violations of U.S. and Utah Constitutional rights.

“This is a law suit is about civil rights violations and Utah’s Division of Securities gone wild,” said JoAnn S. Secrist, former Utah Assistant Attorney General and legal counsel for Brock and Rice. “The rights of over 100 financial agents have been trampled by the runaway tactics of an unbridled few. We believe the DOS actions have been a gross misconduct of justice.”

2008 Legislative Audit Findings:
In a Salt Lake Tribune article dated July 3, 2008, Steven Oberbeck summarized the Legislative Audit findings. “In a scathing review, the Office of the Legislative Auditor General indicates that the division has stepped far out of bounds. Auditors are calling for widespread reform to correct systemic problems that include:

  • Secret investigations in which the targets never get a chance to explain themselves before charges are filed.
  • The use of threats and intimidation tactics to coerce cooperation with division investigators.
  • Coercive settlement tactics that include keeping unwarranted allegations in cases to be used as bargaining chips for negotiations.
  • The division's director is allowed to serve as prosecutor, judge and jury over those the division regulates.
  • Fines that are based on "making it hurt" rather than being tied to the seriousness of the offense.
"This audit has confirmed everything we've heard about how the Securities Division has been allowed to operate - and everything we feared," said Rep. Jim Bird, R-West Jordan, who called for the original inquiry.

About Henry S. Brock:
Hank Brock, CPA, MBA, CLU, ChFC, age 56, Chief Executive Officer (CEO), over 30 years experience starting and successfully building highly profitable companies in financial advisory services, securities, asset management, real estate and business management consulting, including Brock and Associates, Inc. which he built from scratch to a 55-person independent fee-based financial consulting firm, the assets of which he sold in 1997. Brock was named by Money Magazine one of America’s Top Financial Planners, and is the author of Your Complete Guide to Money Happiness. From 1991 through 2003 he also ran Five Star Asset Management, LLC, another Registered Investment Advisory Firm with the SEC that provided fee-based professional portfolio management services to individuals, trusts, and corporations. In 1976 he co-founded his first investments partnership, Brock, Hinckley, Schow, and Company.

Hank received a B.S. degree in Accounting from Brigham Young University with a minor in Economics. He received a Masters degree in Business Administration (MBA) with an emphasis in investment analysis and taxation from the University of Utah, where he additionally completed a year of Ph.D. studies in Finance. He regularly attends numerous advanced-level courses and conferences throughout the country dealing with special issues facing business-owners, professional services, and seniors, such as business valuation, succession planning, business operations, corporate finance, investments, taxation, as well as estate planning, charitable giving, and retirement planning, etc. He has taught hundreds of accredited continuing professional education courses over the years to CPAs.

In 1990 Hank was appointed by Utah Governor Norman Bangerter as one of three members of the Utah Thrift Panel, established by the 1989 Legislature to arbitrate claims against five failed thrift institutions. He is a former trustee of the Utah Accountants Political Action Committee. He has served on numerous professional association committees, including the legislative, ethics, and financial planning committees of the Utah Association of CPA’s, as well as similar positions with other professional societies, including the Society of Financial Services Professionals, NAIFA, and as President of the Financial Planning Association of Utah, 1988-1989.

About Jay Rice:
JAR Development is operated by Jay R. Rice, a long time resident of Salt Lake City, Utah. Jay has specialized in gated, adult communities along the Wasatch front for over 25 years. His attention to detail is extraordinary, making sure that every facet of each project is carefully followed from inception to completion. Jay goes far beyond the required "industry standards", making sure that each JAR project meets "his" standards of quality and design.

More Information:
For more information, please contact JoAnn Secrist, legal counsel at: joann.s.secrist(at)gmail(dot)com or 435-668-2021.

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