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BrokerCheck Report
EDWARD FRANCIS STETZ JR CRD# 1223245
Report #61645-19306, data current as of Wednesday, April 14, 2010
Section Title
Page(s)
Report Summary
Broker Qualifications 2 - 3
Registration and Employment History 4 - 5
Disctosure of Customer Disputes, 6 - 11
Disciplinary, and Regulatory Events
About this BrokerCheck Report 12
Dear Investor:
FINRA has generated the fotlowing BrokerCheck report for EDWARD F. STETZ JR. The information contained within this report has been provided by a FINRA member firm(s) and securities regulators as part of the securities industry's registration and licensing process and represents the most current information reported to the Central Registration Depository (CRDI,) system.
FINRA regulates the securities markets for the ultimate benefit and protection of the investor. FINRA believes the general public should have access to information that will help them determine whether to conduct, or continue to conduct, business with a FINRA member firm or any of the member's associated persons. To that end, FINRA has adopted a public disclosure policy to make certain types of information available to you. Examples of information FINRA provides on corrently registered individuals and individuals who were registered during the past two years include: actions by regulators. investmentrelated civil suits, customer disputes that contain allegations 01 sales practice violations against brokers. all felony charges and convictions, misdemeanor charges and convictions relating to securities violations. and financial events such as bankruptcies, compromises with creditors, judgments. and liens. FINRA also provides certain information on individuals whose registrations terminated more than two years ago.
When evaluating this report. please keep in mind that it may include items that involve pending actions or alleqations that may be contested and have not been resolved or proven. Such items may, in the end. be withdrawn or dismissed, or resolved in favor of the
firm or broker. or concluded through a negotiated settlement with no admission or finding of wrongdoing.
The information in this report is not Ihe only resource
you should consult. FINRA recommends that you
lea rn as much as po ssib I e about the ind lvid u a I broker or brokerage firm from other sources. such as professional references, local consumer and investment groups, or friends and family members who already have established investment business relationships.
FINRA BrokerCheck is govemed by federal law. Securities and Exchange Commission (SEC) regulations and FINRA rules approved by Ihe SEC. State disclosure programs are governed by state law, and may provide additional information on brokers and firms licensed by the state. Therefore. you should also consider requesting information from your state securities regulator. Refer to www.nasaa.org for a com plete I lst of sis te secu rili es reg ula to rs.
Thank you for using FINRA BrokerCheck.
Using this slte/lntormation means that you accept the FINRA BrokerCheck Terms and Conditions. A complete list of Terms and Conditions can be found at
brokercheck. flnra.org
..
For additional information about the contents of this report. please refer to the User Guidance or www.flnra.orgfbrokerci1eck.lt provides a glossary of terms and a lis! of frequently asked questions, as well as additional resources. For more information about FINRA, visit www.finra.orq.
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,EDWARD F. STETZ J~
This broker is not currently registered witl1 a FtNRA
firm. '.. . ..
Report Summary for this Broker
User Guidance
The report summary provides an overview of the broker's professional background and conduct The individual broker, a FINRA-registered firm(s), and/or securities regulator(s) have provided the information contained in this report as part of the securities industry's registration and licensing process The information contained in this report was last updated by the broker, a previous employing brokerage firm, or a securities regulator on 09/03/2009,
Broker Qualific,ations
This broker is not currently registered with a FINR.A firm.
This broker has passed:
• 1 Principal/Supervisory Exam
• 1 General Industry/Product Exam .2 State Securities Law Exams
Registration and Employment History
This broker was previously registered with the following FINRA member firms:
SAGEPOINl FINANCIAL, INC. CRD# 133763
JOHNSTOWN, PA 10/2005·06/2009
SUNAMERICA SECURITIES, INC. CRD# 20068
PHOENIX, AZ
0711989 - 1012005
FSC SECURITIES CORPORA lION CRD#7461
ATLANTA,GA
01/1989 - 07/1989
For additional registration and employment history details as reported by the Individual broker, refer to the Registration and Employment History section of this report,
Disclosure of Customer Disputes, Disciplinary, and Regulatory Events
This section includes details regarding disclosure events reported by or about this broker to CRD as part of the securities industry registration and licensing process. E.xamples of such disclosure events include formal investigations and disciplinary actions initiated by regulators, customer disputes, certain criminal charges and/or convictions, as well as financial disclosures, such as bankruptcies and unpaid judgments or liens.
I
Are there events disclosed about tnis broken Yes
The following types of disclosures were report.ed:
Reguialo(y .Event
Customer Dispute
Termination
Cl2010 FINRA All rights raservec, RepcrtltG1645-19306 about EDWARD F, STETZ JR. Dala current as otWednesday, April 14, 2010.
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User Guidance
Broker Qualifications
Flnr;"
Registrations
This section provides the self-regulatory organizations (SROs), states and U.S. territories the broker is currently registered and licensed witll, the category of each registration, and the date on which the registration became effective. This section also provides the physical location of each branch that the individual broker is associated with for each listed employment.
This broker is not currently registered with a FINRA firm.
C<Dl0 FINRA. All rignls reserved. Reportll61645-19306 aoout EDWARD F. STETZ JR Data current as 01 Wednesday. April 14, 2010.
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user Guloance
Broker Qualifications
Industry Exams this Broker has Passed
This section includes all current principal/supervisory, general product/industry, and/or state securities law exams that the broker has passed. Under certain, limited circumstances, a broker may receive a waiver of an exam requirement based on a combination of previous exams passed and qualifying work experience. Likewise, a new exam requirement may be grandfathered based on a broker's specific qualifying work experience. Information regarding instances Of exam waivers or the grand fathering of an exam requirement are not included as part of the BrokerChe~k report.
This individual has passed 1 principal/supervisory exam, 1 general industry/product exam, and 2 state securities law exams.
PrincipallSupervisory Exams Exam
Category
Date
Generallndustry/Product Exams Exam
Gen.eral Securities Representative ExamTnation
Category Series 7
State Securities Law Exams
Category
-----~~~.~.--------~
Serles 63
Series 65
Date 01/1711984 03123/1999
Exam
Uniform Securities Agent Stat9'law EX-amlnation
Uniform Investment Adviser Law Examination
Additional information about the securities industry's qualifications and continuing education requirements, as well as the examinations administered by FINRA to brokers and other securities professionals can be found at hltp:/lwww.finra.org/lnduslry/Compllance/Registration/QualificationsExamslindex. hIm.
~010 FINRA_ All rights reserved. Rep<lrt# 61645-19306 about EDWARD F. STETZ JR. Data current as of Wednesday, April 14,2010.
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Usef Guit;!~oC!l
Registrat.ion and Employment History
Previously Registered with the Following FINRA Firms
FI NRA records show this broker previously held FINRA registrations with the following firms:
CRO# 133763 20068 7461
JOHNSTOWN, PA PHOENIX,Al ATI.ANTA, GA
.~, ... ' ffl<, :
Registration Dates Firm Name
---
1012005 - 06'2009 SAGEPOINT FINANCIAL, INC_
0711989 - 10/2005 SUNAMERICA SECURITIES, INC, 01/1989 - 07/1989 FSC SECURITIES CORPORAT10N
Branch Location
COMMONWEALTH EQUITY SERVICES, INC. 8032
J_ T. MORAN & cd, JNC
07/1985 - 05f1988 BUTTONWOOD SECURITIES CORPORATION 7303
OF MASSACHUSETIS
1211983 - 0811985
Employment History
This section provides up to 10 years of an individual broker's employment history as reported by the individual broker on the most recently f,led Form U4.
Ptease note that the broker is required to provide this information only while registered with a FINRA firm and the information is not updated via Form U4 after the broker ceases to be registered. Therefore, an employment end date of "Present" may not reflect the broker's current employment status.
Employment Dates Employer Name
01/2009 - Present SAGEPOINT FINANCIAL, INC.
10{2005 - 01/2009 AJG FINANCIAL ADVISORS, INC,
~-.~~=---~~~
Employer Location
Affiliations
This section includes information, if any, as provided by the broker regarding other business activities Ihe broker is currently engaged in either as a proprietor, partner, officer, director, employee, trustee, agent or otherwise. This Section does not include non-investment related activity that is exclusively charitable, civic, religious or fraternal and is recognized as tax exempt.
INTERSTATE HEALTH INSURANCE AGENCY,506 BROAD STREET, JOHNSTOWN, PA 15906, AGENT, FIXED INSURANCE, STARTED 01-01-1985,40 HOURS PER MONTH 2 TRADING HOURS PER DAY SELLING HEALTH INSURANCE, TERM LIFE POLICIES, FIXED ANNUITIES, HIGHMARK BLUE CROSS, UPMC, CAPITAL HEAL TH PLANS, ASSURANT HEALTH, GBU LIFE, PRESIDENTIAL UFE, NORTH AMERICAN LIFE, AMERICO LIFE, FIRST
©2010 FINRA. All rights reserved. Re~rt# 6164~19300 eMU! EDWARD F. STETZ JR. Data currern as of Wednesday, April 14. 2010.
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User GUldance
Registration and Employment History
Affiliations, continued
COLONIAL, CONSECO, lNG, FIRST COLONY, TRUDENTlAL, WEST COAST LIFE, BANNER LIFE, GENWORTH, UNITED OF OMAHA, COLONIAL, AND AfALAC. REPRESENTATIVE OF AIGFA CORP. RIA. 03-23-1999, BTS MANAGEM ENT, AM ERICAN FI NANCIAL MANAGEM ENT, CURIAN, 5 HOURS PER DAY AIG BANK 09-01-2004, PROVIDE MORTGAGE SERVICES, 0 TIME, HAVE NOT OFFERED ONE MORTGAGE AS TO DATE. NUMBER OF CLIENTS - ZERO.
(>201Q FINRA. All rights ,.served. Rep<lrt#6164!>-19306 about EDWARD F. STETZ JR. Data curran as of Wednesday, Aprfl14. 2010.
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Disclosure of Customer Disputes, Disciplinary, and Regulatory Events
What you should know and/or consider regarding any reported disclosure events:
Before reaching a conclusion regarding any of the information contained in this BrokerCheck report, you snoulc ask the broker to clarify the specific event(s) listed, or to provide a response to any questions you may have. "Pending" actions involve unproven and/or unsubstantiated alleqations.
Disclosures in BrokerCheck reports come from different sources:
Self-disclosure: Brokers are required to answer a series of questions on their application requesting securities industry registration (Form U4). For example, brokers are asked whether they have been involved in certain regulatory, civil, criminal and financial matters (e.g., bankruptcy), or have been the subject of a customer dispute. Regulator/Employer postings: In addition, regulators and firms that have employed a broker also may contribute relevant information about such matters. All of this information is maintained in C RD.
Certain threslJolds must be met before an event is reported to CRD; for example:
A law enforcement agency must file formal charges before a broker is required to report a particular criminal event.
likewise, a regulatory agency must meet established standards before initiating a regulatory action and/or issuing Sanctions. These standards typically include a reasonable basis for initiating the action after engaging in a fact-finding process.
In order for a customer dispute to be reported to CRD, a customer must:
Allege that their broker engaged in activity that violates certain rules or conduct governing the industry: and Claim damages of $5,000 or more as a result of that actiVity.
(Note: customer disputes may be more subjective in nature than a criminal or regulatory action)
Certain customer disputes contained in this BrokerCheck report may no longer be required to be reported by the broker.
Generally, these will be written complaints that were initiated more than two years ago. Once an event is not required to be reported, a broker has no obligation to update the matter.
What you should consider when evaluating the status or disposition of a reported disclosure event:
Disclosure events may be pending, on appeal, or final. Pending and 'on appeal' matters refiect allegations that (1) have not been proven or formally adjudicated, or (2) have been adjudicated but are currently being appealed. final matters genera.lly may be adjudicated, settled or otherwise resolved.
An adjudicated matter includes a disposition by (1) a court of law in a criminal or civil matter or (2) an administrative panel in an action brought by a regulator that is contested by the party charged with some alleged wrongdOing.
A settled matter generally represents a disposition wherein parties involved in a dispute reach an agreement to resolve the matter.
102010 FINRA. All rights reserved. Report# 61645-19306 about EDWARD F. STETZ JR. Data current as of W"dnesday, April 14. 2010.
User Guidaoce
-
Flnra~
Po S5 ib I emu Iti pie re porti n g sou rces - please note:
Disclosure details may be reported by
more than one source (i.e., regulator, firm, or broker). When this occurs, all versions of the evenl will appear in the BmkerCheck report. The different versions of the same disclosure event are separated by a solid line with the reporting source labeled.
6
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(Note: brokers may choose to settle customer disputes or regulatory matters for business or other reasons) Customer disputes also may be resolved without any payment to the customer or any finding of wrongdoing on the part of the individual broker.
Pending Final On Appeal
Regulatory Event 0 1 0
Customer Dispute 1 0 N/A
Termination N/A 1 N/A 02010 FINRA. A1lnghts reserved. Report# 61645·19306 about EDWARD F. STETZ JR. Data current as of Wednesday, Aptj114, 2010.
7
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Disclosure Event Details
When evaluating Ihis information, please keep in mind thai a number of items may involve pending actions or allegations that may be contested and have not been resolved or proven, The ilems may, in the end, be withdrawn or dismissed, or resolved in favor of the individual broker, or concluded through a negotiated settlement for certain business reasons (e.c., to maintain customer relationships or to limit the litigation costs associated with disputing the allegations) with no admission or finding of wrongdoing.
This report provides the information exactly as it was reported to CRO by the individual broker, a member firm(s). andlor by securities industry regulators. Some of the specific data fields contained in the report may be blank if the information was not provided to CRD.
This section provides information regarding a final. regulatory action that was reported 10 CRD by the individual broker, a, member firm, andlor a securities regulator. The event may include a final, formal proceeding initiated by a regulatory authority (e.q., a state securities agency, a self-regulatory orqanizatlon, a federal regulator such as the SEC or the Commodities Futures Trading Commission (CFTC), or a foreign financial regulatory body) for a violation of investmentrelated rules or regulations. This section may also include a revocation or suspension of a broker's authority to act as an attorney, accountant or federal contractor. Disclosure 1 of 1
Reporting Source:
Regulatory Action lnltlatad By:
Sanction(s) Sought:
Dale Initiated:
Docket/Case Number:
Employing firm When activity occurred which led to the regulatory action:
Regulator
PENNSYLVANIA CONTACT: COUNSEL JACK CHIAPPETTA (412)-565-5083
Bar
08/25/2009 2009-01-02
SUNAMERICA SECURITIES, INC. AND SAGEPOINT FINANCIAL, INC,
Product Type:
Allegatiofls:
No Product
Current Status:
Resolution:
EDWARD F. STETZ, JR, WHILE A REGISTERED AGENT OF SUNAMERICA SECURITIES, INC., AND SAGEPOINT FINANCIAL, INC" BORROWED MONEY FROM AT LEAST TWO SECU RITIES CLIENTS THAT ARE PA RESIDENTS FOR AN AGGR EGATE TOTAL OF AP PROXIMA TEL Y $332.000.
Final
Settled
m010 FINRA. All rights reserved, ReP<lrt#61645-193Cl6 about EDWARD F. STETZ JR. Deta current as of Wednesday, Aprt114. 2010,
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user Guidance
Does the order constitute a No
final order based on
violations of any laws or regulations that prohibit
fraudulent, manipulative, or deceptive conduct?
Resolution Date:
D8/25/2009
Sanctions Ordered:
Bar (Permanent)
Other: EDWARD F. STETZ, JR., IS ORDERED TO PAY $5,000.00 TO THE COMMONWEALTH OF PA, WHICH AMOUNT REPRESENTS A PORTION OF THE INVESTIGATIVE AND LEGAL COSTS IN THIS MATTER. PAYMENT TO BE MADE AS FOLLOWS: $3,000.00 TO BE PAID CONTEMPORANEOUSLY WITH THE SUBMISSION OF AN EXECUTED OFFER OF SETTLEMENT: $1,000.00 ON OR BEFORE SEPTEM BER 15, 2009, AN 0 $1 ,OOO.OD 0 N OR BEFOR E OCTOBER 15, 2009.
Sanction 1 of 1 Sanction Type:
Capacities Affected:
Duration:
Bar (Permanent) ALL
Start Date:
End Date:
08/25/2009
Summary:
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER ISSUED TO EDWARD F. STETZ, JR.
C2010 FINRA. All rights reserved Report# 61641>-19306 about eDWARD F. STETZ JR. Data current as of Wednesday, April 14, 2010.
9
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Customer Dispute - Pending I '
This section provides information regarding pending customer disputes that was reported to CRD by the individual broker, a member firm, and/or a securities regulator. The event may include a pending consumer-initiated, investment-related arbitration proceeding or civil suit that contains allegations of sales practice violations against the broker. It may also include a pending, consumer-initiated, investment-related written complaint, which contains either allegations of sales practice violations and compensatory damages of $5,000 or more, or allegations of forgery, theft or misappropriation or conversion of funds or securities. Details concerning pending written complaints generally involve customer disputes filed with a current or previous employing brokerage firm within the past twenty-four months. Pending written complaints that were initiated more than two years ago that did not evolve into an arbitration or civil proceeding are no longer required to be updated by the broker via Form U4.
Disclosure 1 of 1
Reporting Source:
Employing firm when activities occurred Which led to the complaint:
Allegations:
Product Type:
Broker
SUNAMERICA SECURITIES, INC.
BENEFICIARY OF CUSTOMER (DECEASED) ALLEGES THAT ESTABISHED INVESTMENT ACCOUNTS AND ANNUITIES SOLD TO DECEASED IN 2003 WERE NOT SUITABLE AND HAS REQUESTED AN ACCOUNTING OF THE DECEASED'S INVESTMENTS.
Annuity(ies) - Variable
Alleged Damages: $0.00
Customer Complaint Information
Dale Complaint Received:
Complaint Pending? Settlement Amount:
Individual Contribution Amount:
01/2012009
Yes
C2Ql0 FINRA All right' reserved, Report# 61645·19306 about EDWARD F. STETZ JR. Data current as ofWec1nesday. April 14, 2010.
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Employment Separation After Allegations .
This section provides information regarding a separation of employment. that was reported to CRO by the individual broker, a member firm, and/or a securities regulator. The event may include a separation of employment that resulted in a voluntary resignation, discharge or permission to resign after allegations were made that accused the broker of violating investment-related statutes, regulations, rules or industry standards of conduct; fraud or the wrongful taking of property: or failure to supervise in connection with investment-related statutes. regulations. rules or industry standards of conduct. Disclosure 1 of 1
Reporting Source:
Brokerage Firm Name:
Termination Type:
Termination Date:
Product Type:
Firm
SAGEPOINT FINANCIAL. INC. Discharged
0512912009
FAILURE TO FOLLOW FIRM'S POLICIES AND PROCEDURES REGARDING GIFTS AND FAILURE TO COMPLY WITH FINRA (NASD) RULE 230 CONCERNING BORROWING FROM CUSTOMERS.
No Product
Allegations:
@2010 FINRA. All right. reserved. Report# 61645·19-306 about eDWARD F. STETZ JR. Data current as 01 Wednesday. Aptil 14. 2010.
11
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About this BrokerCheck Report
BrokerChec.k reports are part of a FINRA initiative to disclose information about FtNRA-registered firms and individual brokers to help investors determine whether to conduct, or continue 10 conduct, business with these firms and brokers. The information contained within these reports is collected through the securities industry's registration and licensing process.
Who provides the information in BrokerCheck?
Information made available through BrokerCheck is obtained from CRD as reported through the industry registration <irid licensing process.
The forms used by brokerage firms, to report information as part of the firms registration and licensing process. Forms BO and BDW, are established by the SEC and adopted by all state securities regulators and SROs. FINRA and the North American Securities Administrators Association (NASM) establish the Forms U4 and U5, the forms that are used for the registration and licensing process for individual brokers. These forms are approved by the SEC. Regulators report disciplinary information for firms and individual brokers via Form U6.
How current is the information contained in BrokerChllck?
Brokerage firms and brokers are required 10 keep this information accurate and up-te-cate (typically not later than 30 days after learning of an event), BrokerCheck data is updated when a firm, broker, or regulator submits new or revised information to CRD, Generally. updated information is available on BrokerCheck Monday through Friday.
What information is NOT disclosed through BrokerCheck?
Information that has not been reported to CRO or that is not required to be reported through the registration and licensing process is not disclosed through BrokerCheck. Examples of events that are not required to be reported or are no longer reportable include: judgments and liens originally reported as outstanding that have been satisfied and bankruptcy proceedings filed more than 10 years ago, Conversely certain customer cornplalnt information that is not required to be reported may be disclosed provided certain criteria are met,
Additional information not disctosed through BrokerCheck includes Social Security Numbers, residential history information, and physical description information. On a case-by-case basis, FINRA reserves the right to exclude information that contains confidential customer information, offensive and potentially defamatory language or information that raises significant identity theft or privacy concerns that are not outweighed by investor protection concerns. FINRA Rule 8312 describes in detail what information is and is not disclosed through BrokerCheck.
Under FINRA's current public disclosure policy. in oertain limited circumstances, most often pursuant to a court order, information is expunged from CRD, Further information aboul expungement from CRO is available in FINRA notices 99-09, 99-54. 01-65, and 04-16 at www,finra.org.
For further information regarding FINRA's BrokerCheck program, please visit FINRA's Web site al www.finra.org/brokerdheck or call the FINRA BrokerCheck Hotline at (800) 289-9999, This hotline is open Monday through Friday from 8:00 a.rn. to 8:00 p.rn., Ea,stern Time (ET),
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iro010 FINRA All righls reserved. Report#61645-19306 about EDWARD F. STETZ JR Data current as of Wednesday. Aprtl14, 2010.
12
EXHIBITB
Jan, 14, 2010 3:35PM
No. 0473 P. 2/33
~' ... - ,t'
"
COMMONWEALTH OF PENNSYLVANIA
SECURITIES COMMISSION
JUN 0 6 ZOOS
* * * ~ * * * * *
SWORN STATEMENT OF: * Administrative Proceeding
EDWARD STETZ, * Docket No. 2009-01-02
Respondent *
* * * * * * * * *
LOCATION!
Pittsburgh State Office Building 300 Liberty Avenue, Room 806
Pittsburgh, PA 15222
HEARING:
Friday, May 22, 2009
9:28 a.m.
WITNESSES; None
Reporter: Valerie B. Gregory
Any reproduction of this transcript is prohibited without authorization by the certifying agency.
Sargent's Court Reporting Service, Inc. (814) 536-8908
No,0475
p, 25
1 2
other com~anies did to charge those fees.
MR. MENSCH:
You said that you were charging her two
3 and a half percent.
4 A.
I said that to you, yes.
And she gave me those as
5 gifts.
I was confused.
6
MR. MENSCH:
Oh, okay.
Now, so you told us whenever
7
8 we were in your office that you used the same basis as
9 the
10 A.
11 yes.
12
13
14 A. When I managed accounts, I used the same basis;
MR, MENSCH:
But now you're saying that was a ---.
Mrs, Spitzioli --- I put them down as fees, and I
!.
15 was confused at the time.
But she gave me these as
16 gifts.
17
MR. MENSCH:
. 1.8.
And there's no --- .
:J
19 A.
She continued to give me these as gifts.
I: .. j :!: 'r
,20 21
And she did --- you said that you charged
MR. MENSCH:
22 these f~es --- when we were in your office, you
I I
• 'I "i
23 charged these fees from the time you took over the
24' account, even whenever her husband was alive; is that
25 correct?
''''::: •• '1:"
Sargent's Court Reporting Servi c e , Inc.
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74
Jan. 14. LUlU j:·.iOrllll
!I'
, ~.::;
1 A.
No. 0475 P. 26
Well. when her husband was alive, we were In 50me
2 fee-based accounts.
But he --- we moved out of those
3 accounts because he got skittish on investments and he
4 wanted fixed annuities.
~nd that's why she bought
5 these is because that's what she wanted through him.
7 Q.
6 BY ATTORNEY CHIAPPETTA:
Mr. Stetz, just so I'm clear.
Are you indicating
8 that you charged her a fee
9 A.
10 Q.
or fees?
I didn't charge her a fee.
She gave me gifts.
11 investment-related advice?
Okay.
So at no time did you charge her a fee for
12 A.
At no time --- and maybe in the 2000, 1999, 1998.
14 Q.
13 I would have to go back and look.
Okay.
I'm asking --_ well, Le t r s just step back
15 here a second.
~rom when you first acquired Ms.
16 spitzioli as a client --- and let's include Sam
17 spitzioli.
as A. 19 Q.
ph-huh (yes).
i i
( :1
20' iz:ivestment advice?
pid you ever charge them fees for providing
21 A.
22 Q.
Yes.
Okay_
And these fees were provided independent of
23 the_sale of a product?
That's correct.
24' A_
- -, ij;
: l.
25 Q.
Okay.
And those fees were paid directly to you?
~.argent's Court Reporting Service,
----.-" .. ,." -' , 814) 536 - 8908
Inc.
75
Jan. 14, LUlU j:LU~M
No, 0.175 P. 27
I:
1 A,.
No.
Those fees were paid to --- I think at one
2 time, they were with AFM, American Financial
3 Managemen t .
And what was American Financial Management?
4 Q. 5 A.
Oka,y.
A third-party money manager.
6 Q.
Okay.
Were you employed as an investment advisor
7 representative with
8 A.
9 Q.
10 A.
11 Q. 'Yes,
--- that firm you just identified?
Yes.
Okay.
Now, at any point after the time that you
12 were employed, let's say as an investment advisor
13 representative with --- again, I don't -~- if you
14 could repeat the name of that firm?
15 A. SagePoint.
16 Q. No, no, no. You had indicated somebody else.
17 A. Oh, American Financial Management.
18 Q. . Arn e r i Can Finan.cial. After that point in time, did 19 you received fees from Ms. Spitzioli for prQviding 20 investment advice?
21 A.
'She had a small annuity that they were managing.
22 I think it was with Sun America Anchor Annuities.
23 Q.- Okay.
You said
you were referring to they
24 were ,managing.
And when you say they ---?
:,
25 A.
It was AFM .
. "'--"''''Sargent's Court Reporting Service, Inc. (814) 536-8908
76
Jan. 14. 2010 3:20PM
No, 0475 P. 28
'!-
Yes .
I did remember saying tbat to you, and I was
1 Q.
Okay, all right. My question to you specifically
2 is after your relationship with AFM, at any point
3 after that, did you charge Sam or Maria Spitzioli fees
4 for
5 A.
No.
6 Q.
providing investment advice?
7 A.
No.
8 9
MR. MENSCH:
And that's directly contrary to what you
10 told liS ~n the office.
11 A.
And I told you in the office --- I said fee
12 because that's what she told me to say when we were
13 working together.
But as I later changed it to you
14 and to your home office, I said those were gifts.
, ,
15
MR. MENSCH:
16
But when we were In your off~ce,
17' A.
Yes, I remember saying that to you.
18
MR. MENSCH:
1.9
you said that if you charged them
20. fees, and you used
21 A. I did say that to you.
22
MR. MENSCH;
23
the same basis
24 A.
. 25,. i n __ .c.oz.r.e.c.t .
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11
And that was charged as a fee?
1
MR. MENSCH:
2
And you said that you were charging that
3 to manage their money, and it was a total --- it was
4 of their total net worth that it was under management,
5 is how you
6 A.
I said that.
That is correct, because ---
7
MR. MENSCH.
8
same basis
9 A.
--- Mrs. Spitzioli said if anybody asks you, Bay
10 it was --- they were gifts.
MR. MENSCH:
12
Well, how about --- how about the
13 executor of the estate of her estate, Ms.
14 A.
Rehosik?
15
MR. MENSCH:
ROhosik.
What was that fee that you
16
17 charged her that you told us about?
That was a fee, and I was incorrect.
1 had her
18 A..
19 write a fee out, and I put it in the account. 20 inc~rrectly spent it.
And I
. ,
21
MR. MENSCH;
22 okay.
23 A . " T ha tis cor r e ct.
24 MR. MENSCH:
vr, . ~ ~
25
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13
MR. ~ENSCH:
1 A.
That is correct.
2
MR. MENSCH:
3
Well, you told
4 BY ATTORNEY CHIAPPETTA:
5 Q.
A fee for providing investment advice?
6 A.
That is correct.
7
MR. MENSCH:
8
And you told us that you did that because
9 she wanted the same service --- she liked the service
10 that you'd given to Spitziolis.
And you were charging
11 her the same fee as you charged them; is that correct?
12 A.
At one time, yes.
Vh-huh (yes).
MR. MENSCH:
14
Now, was there anybody else that you
15 would now are saying are gifts that you charged fees
16 to?
17 A.
NO.
18
MR. MENSCH:
19
Such as Weavers?
20 A.
The Weavers are loans.
21
MR. MENSCH:
22
And you say you'd never charge thero a
23 fee? .
24 A,
'Margo was in a managed account with BTS.
25
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Jan. 14. 'LOIO 3:20PM
No. 0475
. 31
1
2 A.
3 4
5 A.
6
7
8 a fee?
9 A.
10
11
12 A.
13
14
15 A.
16
17
18
19
20 A.
21
22
23 A.
24
2S Uh-huh (yes).
A third-party money manager.
MR. MENSCH:
Uh-huh {yes}.
She writes the checks out to those people.
MR. MENSCH:
Uh-huh (yes}.
But you never charged them
Through BTS.
MB.. MENSCH:
Other than through BTS?
That's correct.
MR. MENSCH:
If you had them give you any funds ---?
Those were loans.
MR. MENSCH:
All loans.
ATTORNEY ROZIeR:
But let --- wait until he answers
I'm sorry.
ATTORNEY ROZICH:
Wait for the question and then respond.
okay,
I'm sorry.
MR. MENSCH:
Did you ever explain to them they were
t-'o-'-:
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Jan. 14, lUlU 3:20PM
N .0475 P. 32
1 fees originally, and then you changed it
2
ATTORNEY ROZICH:
3
And who are we speaking of first?
4
MR. MENSCH:
5
The Weavers and r --- his sister, I think
6 the Weavers and his sister.
7 A.
Not that I recall.
8 9
MR. MENSCH:
So if they told us that you were charging
10 them fees, that's an incorrect s t a t erue n t.?
11 1>;.
TO my knowledge, yes, because they were fees ---
12 or not fees, they were loans.
13 BY ATTORNEY CHIAPPETTA:
14 Q.
Mr. stetz, I think you indicated when Mr. Kiehl
15 and Mr. Mensch initially had asked you at some point
16 during the course of the exams that they had with you
17 that you had told them that you had charged Ms.
18 Spit~ioli a fee for managing her money --- and is that
19 correct? You told her at that time ---r
20 A.
That is correctl yeah.
21 Q. .oxay ,
And now you're indicating that the only
22 reason YOu told them that was because Ms. Spitzio1i
23' had told you before she died to tell people that you 24 had ciharged her a fee for the management of her
25 account, when in fact it was a gift?
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No. 0475 p, 33
21
Okay.
1 A.
Yes.
2 Q.
Okay.
3 A.
There was a lot of pressure on Mrs. Spitzioli to
4 get her monies to certain peoples in New York; okay?
5 And they hounded the poor lady to death for the
6 monies.
And she did not want to give them to these
7 people.
And, you know, she gave me gifts.
8 Q.
Okay.
That may be so, but my point is --- and I
9 just want an answer to this question.
That's ---
10 A.
Go ahead.
11 Q.
--- another issue.
Is when Mr. Kiehl and Mr.
12 Mensch came out
13
14
15
16
17 I mean,
18
19 ATTORNEY ROZICH:
I believe that's been asked and answered.
ATTORNEY CHIAPPETTA:
Okay.
Well. I don't think it has been.
I asked ---.
ATTORNEY ROZICH:
I mean, you can go ahead.
I'm going to
20 make an objection.
ATTORNEY CHIAPPETTA~
22
All right.
Yes, the objection's noted on
23 the re<;:ord.
24
A.TTORNEY ROZICH:
25
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No. 0475 P. 34
83
1 BY ATTORNEY CHIAPPETTA:
2 Q.
My question is when Mr. Kiehl and Mr. Mensch
3 initially asked you about that, you had informed them
4 that you charged Ms. spitzioli a fee for managing her
5 account?
6 A.
Yes, I did.
7 Q.
Okay.
And you had said now that the reason why
8 you said Lhat was because Ms. Spitzioli before she
9 died had told you to tell somebody that if they asked
10 you, when in fact
They were g.i f t 5 .
11 A.
12 Q.
13 A.
14 Q.
15 A. --- they were for gifts.
That's correct.
Okay. So, now you're changing your story.
r changed -~- when I wrote the home office and
16 replied to the statements, I told the home office they
17 were gifts.
18 Q .. You told the home office they were gifts, but yOu 19 d i dn v t; ·tell two state regulators they were gifts?
20 A.
That's Correct.
But I thought the home office
21 told· them that those were gifts.
And I thought that
22 you we.z e to ld tha t they were gi f ts .
23 Q .. Okay. 24 Exh.ibi t 32.
Now, I'm referring to what I've marked as
25
(Commonwealth Exhibit 32 marked fo~
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No, 0475 P. 58
15 16
Yes.
1
(commonwealth Exhibit 47 marked for
2
identification.)
3
ATTORNEY ROZIeR:
4
We don't have that.
5 BY ATTORNEY CHIAPPETTA;
6 Q.
If you go to page three when you have a chance,
7 please? And if you can confirm; under checking
8 activity, there was a check written to Interstate
9 Health Agency in the amount of $10,000.
That's your
10 company?
11 A,
Yes.
12 Q.
And now, I'm looking at the October 1st, 2006
13 brok~rage account statement for Maria Spitzioli. I'm
14 marking it as E~hibit 48.
(Commonwealth Exhibit 48 marked for
identification. )
17
ATTORNEY ROZICH;
18
Yes, we have that.
This LS the last 2006
;~.- -
19 we have.
~o BY ATTORNEY CHIAPPETTA:
21 Q,
A~d if you go to page three; again, if you can
22 confir~, Mr. Stetz.
There was a check written, again,
23 to your company Interstate Health Agency in the amount
24 of ,$11,763.98.
25 A.
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, ;
Just so we're sure here.
The tax --- on
1 Q.
Okay, Mr, Stetz.
Now I don't know what else is
2 out there, but from July 1st, 2004 to December of
3 2006, Ms. Spitzioli had written 14 checks to
4 Interstate Health Agency. And I don't know that r 5 have the exact figure here, but it's over $173,000.
6 would that sound correct to you?
7 A.
I believe so.
8 Q.
And you're telling us that all that money was a
9 gift from Ms. Spitzioli to you?
10' A., Yes.
11' MR. KIEHL:
12 You gave us copies of your income tax
13 forms.
I didn't see any gift income on your income
14 tax.
15 A.
We were aUdited, and we corrected that.
16
MR. KIEHL;
17
You were audited in what?
19 20
MR. KIEHL:
The forms that you gave us are incorrect?
21 A.
To'my knowledge, everything that I gave you was
2) wh a t r.my wife gave --- you know, prepared for the - ~! ,-
23 income tax.
24'
MR. MENSCH:
25
Sargent's Court Reporting Service, Inc. (814) 536-8908
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No, 0475
p, 60
1 your tax returns, initially it --- the money was
2 listed but it was improperly listed as a fee versus a
3 gift; is that correct?
4 A.
5
6
7 A.
8
9:
10 A..
11
12
13 A.
14
15
16
17 Yes.
MR. KIEHL:
Okay.
So when was it corrected?
This year.
Or this past year, excuse me.
MR. KIEHL:
Approximately when?
October, November, December.
MR. KIEHL:
That would be an audit?
Yes.
MR. KlEHL:
An IRS audit?
MR. MENSCH:
And then, so all those fees that we just,
,18 tl).:3;t"",~v~. j us t d es c r ibed were changed to gi f ts - --
,!
19 A, Yes.
20 MR. MENSCH:
21 on your income tax?
2.2 A. Yes.
'.,
23 MR. MENSCH;
24 Going back how far?
,25 A, I believe to '06. I can't a n s we r' that. I'd have I i
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Jan, 14, 2010 3:23PM
No, 0475 p, 61
. ~!. -,
saw Stetz's Insurance Agency on the Schedule
1 to a~k my wife.
2
MR. KIEHL;
3
But the fees were originally --- those
4' amounts of money were originally
5 A.
I counted them as income and corrected it to fees.
6 Or not to fees, to gifts.
7
MR. KIEHL:
8
To gifts in October of last year?
9 A.
Yes,
.10 ;
MR. KIEHL:
But whenever I was in your office in
12 Janu,a;ry, you didn't tell me that.
:<".' ::
You told me they
13 were"'fees i is that correct?
14 A. 'i was incorrect in telling you those were fees.
15
MR, KIEHL:
16
Okay.
17
MR. MENSCH:
18
On your income tax forms, since we're
19 t~lkin~ 'about that .
Interstate Health Agency,
. ~ .. "
20 Incor~orated is a d/b/a of yours; is that correct?
21 A Xes
,
22
, _':;: .f
" ::"j-
23
;;:. :l
.;
24 returri I I MR. MENSCH:
And I don't --- when I look at that tax
25 C, or:something like that; is that c o r r e ct ?
Sargent's Court Reporting Service, (814) 536-8908
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Jan, 14, 2010 3:23PM
No. 0475
p, 62
·.1
"
'.,
1 A.
,\
2
3
4 A.
5
6
7 form?
Yes.
MR. MENSCH:
I was just curious why.
All the income from Interstate went to me.
MR. KIEHL:
So you don't list the DBA on the tax
8, A. No.
', .
. ,
9: 10·
11
,I
12
MR. KlEHL;
Okay.
MR.. MENSCH:
Do you file a tax form for the
14 A.
13 corporation?
No, I haven't.
15
16
.:, .
17 A.
18,
19
20 A.
21
22
MR. MENSCH:
Is that ---7
It's defunct .
There's no money in it.
MR. KIEHL:
Interstate is defunct?
I~: '.>. ~ .'
T~ my knowledge, it is; yes.
MR. KIEHL:
• I
- i'~"-
Do you still have banking accounts with
24 A.
23 that pp~e on it?
'_I I"'
i·have one banking account, and I didn't close it
25 because of this situation.
It was --- because if I
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,
No. 0475
p, 63
3 4
But I counted it
L: close it J then if I need records.
Then I have to go
2 through a long process.
MR. KIEHL:
But you've been making deposits into
5 In te r s tat e
6 A.
No'.
7
MR. KIEHL:
8
in 2Q06? Interstate Health?
Interstate Health in '06, yes.
9 A.
10 on my income tax.
11 MR. KIEHL:
12 But you didn't pay any tax to Interstate
13 Heal th J Incorpora ted?
"
14 A. NO.
15 M:R. KIEHL:
16 You didn't file any tax return?
17 A. No.
It;l MR. KIEHL:
""
19 But you collected you had a bank .,' ,
20 account collecting fees under that name?
2~ A. 22
I had a bank account.
MR. KIEHL:
" .
;
;1
. .'~
23
Okay.
24
ATTORNEY ROZIeH:
25
But just a point of clarification; the
!
e ,
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17
Her husband made the decision early to buy
1 money was going to Interstate Health.
A separate
2 return wasn't filed for Interstate Health, but that
3 money was filed under his individual narnQ.
4 MR. KIEHL:
5 Under the Stetz Insurance Company?
6 ATTORNEY ROZICH:
7 Correct.
8: MR. KIEHL:
9 Under Stetz?
10 ATTORNEY ROZICH:
11 correct.
12 ATTORNEY CHIAPPETTA;
13 Do you want to take a break?
14 ATTORNEY ROZICH:
15 Yes,
16 SHORT BREAK TAKEN
MR. KIEHL:
18
Go ahead, Scot t .
1. I ~ '" •• "
19 20
MR. MENSCH:
I was just wonderingi Maria waS in her
21 70s ~and 80s when a lot of the annuities were
22 purchased.
Why were they suitable for her?
23:'· 'A.
, .
2~ annuities because thQy wanted to avoid probate, and
25 that's what she stuck with.
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113
EXHIBIT C
April 14, 2008
Ms. Pamela Vlatas Legal/Compliance Specialist Sage Point Financial, Inc.
2800 N_ Central Ave., Ste. 112100 Phoenix, AZ 85004
Dear Pam,
In response to your email, dated 4/8/2009, I am providing the following information regarding personal loans from clients, Please note: The PA Examiners did not ask me about any personal loans from clients.
There is no written documentation of terms for any of the following [Dans:
1. Bob Trotz: Childhood Friend
$3,000.00 - April 21, 2008 - Personal Check
$0 paid back - Terms: Pay when able
2. Gary Weaver: Personal Friend
$15,400.00 - May 9, 2008 - Personal Check
$2,200.00 -July 9, ~008 - Personal Check
$5,000_00 - July 11, 2008 - Personal Check
$0 paid back on all loans - Terms: Pay back when house is sold
3564
iOO,-inn .~
SagePoint Financial
Edward F Stetz, Jr. ,RECEIVED
1764 Lyter Drive APR 1 6 2009
Johnstown, PA 15905
Phone - 814-534-2852 or 800-767-9813 LEGAL
Fax - 814-534-2854
DATE:
April 16, 2009
FAX:
602-744-3181
ATTN:
Pamela A. Vlatas
TOTAL PAGES: rNCLUDING COVER: 2
RE: Loans
D1SCLA./lt.1ER; "ntis Ca.'I( nnd eny euaclunents are lntended only ror the Illdi .... -idu a 1 or t:ompany tg whom i~ is addressed and may contain information WlllC.h is privileged, confldcntinl and prohibited (ron; dis.c!osure- or vnaethoriaud use under cpphceble law, 1 f you ore not the ,n,ended recipient of the f,._,. yo II are hereby nndfied lh" any use, discrimlnaticn, or copying of this faJ( or the informotion contained ill this fa:-t is stnctly prohibited by the sender. J[you h..,vc: received this transmission in error. please return the materials received to the sender and destroy nil coples,
3563
700/lno·~
~~ 0 I 6007'Q I, ~O