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Monday, December 9, 2019

Businessman who allegedly violated 1,000 securities laws is subject to sanctions, Maryland court rules

State Court

By Charmaine Little | Nov 22, 2019

Berger
Berger

ANNAPOLIS, Md. (Legal Newsline) – The Court of Special Appeals of Maryland has upheld the disciplinary sanctions imposed on a businessman who allegedly committed more than 1,000 violations of Maryland’s securities laws.

Judges Timothy Meredith, Stuart R. Berger and Robert A. Zarnoch ruled on the case.

Philip Rousseaux filed the appeal after the Circuit Court for Baltimore City affirmed the Maryland Securties Commissioner's discipline against him concerning the sanctions against his businesses Everest Investment Advisors Inc. and Everest Wealth Management Inc. 

Rousseaux allegedly misused MetLife Medallion Signature Guarantee stamps, falsified previous performance results, used a fake investment committee for marketing, misused a financial planning agreement document and other allegations.

“In our review, no rational person who is registered to act as an investment adviser in Maryland could review the results of the contested cases cited by Mr. Rousseaux and, based upon that review, reasonably conclude that there was no likelihood of being barred from providing investment advisory services if that person committed the violations of the [Maryland Securities] Act that the Commissioner found Mr. Rousseaux had committed,” Meredith wrote.

Considering this, Meredith also determined that it was nearly impossible for someone facing so many violations to say they had no notice of the sanctions, or that the commissioner had the authority to impose the sanctions to begin with - especially because several of the violations were done multiple times.

As for his claims that the sanctions were “arbitrary and capricious” since the commissioner reduced the actual number of violations but heightened the sanctions, Meredith pointed out that if Rousseaux’s argument was true, the commissioner would have had to comply with the administrative law judge’s suggestion for the proper sanctions for violations. This would cancel out the actual authority the commissioner has the final decision maker, and the ALJ’s true role as simply making a suggestion.

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