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September 03, 2014 at 06:22 AM
Here’s an update to those of you who have been following the Camardas v. CFP Board lawsuit being heard by Judge Richard Leon of the U.S. District Court in D.C. (See Camardas 1: CFP Board 0. Where Does the Board Go From Here?).
Back in August, the Board struck back at Jeff and Kim Camarda’s request for the Board to furnish records of past disciplinary cases by filing a request for a pile of documents from the Camardas. Since then, the Camardas refused to comply twice, and now the Board has filed its third motion to compel them to comply.;
Clearly, Judge Leon isn’t in any hurry to order the Camardas to comply—and with good reason. In its three motions, the Board has asked for documents that are very different than the “past cases” requested by the Camardas, and have far broader implications: for the Camardas, for all CFPs and for the CFP Board itself.
In its zeal to win the the Carmarda case, it’s beginning to appear that the Board may have lost sight of the bigger picture. It’s not a regulatory body: financial advisors become CFPs voluntarily. Particularly in light of what appeared to be excessive heavy-handedness in other recent “fee-only” cases, its hard-ball actions in the Camarda case have some CFPs that I’ve talked to wondering whether it’s really worth it.
In its many filings, the Board has asked the Camardas for 28 separate categories of documents, with many of those categories potentially containing hundreds (if not thousands) of documents. But in my informal conversations, two of those categories of documents are most troubling to CFPs and to other outside observers. Here’s how the Board worded its most problematic requests in its motions:
“Document Request No. 21: All documents concerning media articles or public statements concerning the Camardas or any of the Camarda Entities.”
Document Request Number 6: “All documents concerning the fees, commissions, or other revenues received, directly or indirectly, by the Camardas and/or the Camarda Entities concerning the Camarda Services from January 1, 2007 to present, including the identity of each client…”
Do you see a problem or two here? In response to Request No. 21, the Camardas wrote: “Plaintiffs object to as overly broad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence, insofar as it seeks ‘all documents,’ regardless of their subject matter and possible relevance to the instant lawsuit.”
And in response to Request 6, they wrote: “Request contains an overbroad time frame, seeks documents from entities having nothing to do with the issues raised in this lawsuit, and seeks the identity of Plaintiffs’ customers.”
But I see bigger issues here.
In the first instance, the CFP Board doesn’t just want “public statements,” it wants all “documents” related to public statements or media articles. Would that include this article? It’s certainly not clear to me what “all documents concerning media articles or public statements” means. If Jeff sent an email to his wife Kim saying “Boy, was Bob’s last blog on us dumb,” would that be included? Would their emails to me, which resulted in stories I wrote, be included? Suppose they were marked “off the record” or something like that?
