The Securities and Exchange Commission and Massachusetts securities regulators have fined Strategic Planning Group a total of $425,000 over conflicts of interest.
Owners of the SEC-registered investment firm — David Alexander Rourke Sr. and Jarrod Andrew Sherman — suggested that clients invest up to 5% of their portfolios in Ecoark Holdings, an agricultural technology company for which both Rourke and Sherman served as consultants at the time (from mid-2013 to mid-2016).
Rourke, who owns 90% of SPG, had invested about $800,000 of his own money in the agtech firm; Sherman, the 10% owner of SPG, had put in some $300,000.
“Both Rourke and Sherman had a financial incentive to invest clients’ funds in Ecoark stock to support or increase Ecoark’s stock price,” according to Secretary of State William Galvin’s office.
The RIA, it added, “failed to provide documentation to investors disclosing the involvement of its owners in Ecoark [despite the fact that] forms filed by SPG stated explicitly that the company did not buy or sell securities that it also recommended to its advisory clients.”