Stephen Abraham Ashton and One for the Money Financial Inc., Petitioners,
Department of Commerce and Securities Commission, Respondents.
Original Proceeding in this Court
Stephen K. Christiansen, Attorney for Petitioners
D. Reyes and Erin T. Middleton, Attorneys for Respondents
David N. Mortensen authored this Opinion, in which Judges
Kate Appleby and Diana Hagen concurred.
Stephen Abraham Ashton-an individual unlicensed to act as an
investment adviser in the state of Utah-acted as an
investment adviser in the state of Utah. Consequently, Ashton
was investigated by the Division of Securities (Division) and
fined $250, 000 by the Utah Securities Commission
(Commission). A portion of Ashton's fine was also
attributable to Ashton's interference with the
Division's investigation. Ashton filed a request for
agency review and the executive director of the Department of
Commerce (Department) affirmed the Commission's fine.
Ashton seeks judicial review and asks us to conclude that
because he was paid by financial institutions rather than his
clients-to whom he gave "free" advice-he was not
required to obtain a securities license. We decline to
disturb the Department's conclusion related to licensure.
However, because the Department erroneously concluded that
Ashton's interference with the Division's
investigation violated section 61-1-19 of the Utah Uniform
Securities Act (Act) we vacate the entire fine and return the
case to the agency to recalculate the fine amount consistent
with this opinion.
Ashton is an insurance agent who owned and operated One for
the Money Financial Inc. in St. George, Utah. Despite not
being licensed as an investment adviser, the articles of
incorporation for Ashton's company declared that its
purpose was to "provide financial planning
services." One for the Money's website also
advertised that it offered "information, education,
advice and planning services," and it included a
testimonial from a client who was "pleased with the
advice and efficient handling of our 401k money."
Ashton also advertised on a variety of mediums holding
himself out as "knowledgeable and able to provide a
broad range of investment and financial services,"
including reviewing investment portfolios, 401(k), and
retirement accounts. For example, Ashton advertised on his
LinkedIn profile that he was "[r]ecognized as one of the
top retirement experts in the nation," had helped
"thousands of individuals" prepare for a
"secure retirement," and had a background in
"traditional financial planning."
Ashton also co-hosted a weekly radio program titled
"Retirement Brothers" with his brother, who also
worked for One for the Money. There, Ashton advertised that he
could review listeners' IRA, 401(k), and other retirement
accounts that were invested in securities.
Ashton gave "free" seminars and consultations in
which he discussed liquidating various securities products,
including stocks, bonds, and mutual funds, in order to
purchase variable annuities-an insurance product. Ashton went
on to compare securities to a roller coaster, a casino, or a
poker game, but he described purchasing annuities as a
"safe" retirement strategy. He also offered to
conduct "free" consultations to review clients'
portfolios. At least one of Ashton's presentation slides
stated, "Tax-Free IRA or 401k Rollovers-It is very
common for individuals to rollover their IRAs and 401ks into
a safe, Fixed Indexed Annuity."
In other words, Ashton's "free" seminar had a
grander purpose: offer negative advice on securities in order
to sell annuities-which are not considered a security,
see Utah Code Ann. § 61-1-13(1)(ee)(ii)(A)
(LexisNexis 2018)-for a commission. After giving the
"free" seminars to prospective clients, Ashton
offered a "free" consultation where he urged his
actual clients to sell or rollover their securities to
purchase annuities. Indeed, Ashton advertised that at any
time he had "over $3.5 million in personal annuity
premium production pending" and that the
"[s]eminars generate[d] close to 50% of [his] total
revenue every year."
Ashton also kept a digital file that tracked his clients. The
notes in that file contained multiple references to
discussions with actual clients about IRA rollovers and Roth
IRA conversions to facilitate the purchase of annuities. The
notes further revealed that clients did indeed liquidate
their securities accounts to purchase annuities. Ashton
admitted that this happened many times.
In 2014, the Division opened an investigation into Ashton.
Early on, the Division noticed that certain information was
missing from files that Ashton had turned over. The Division
issued a subpoena requesting the missing documents, but
Ashton declined to produce them. After the Division filed an
order to show cause requesting that a court compel Ashton to
produce the missing documents, he agreed to give the Division
"full access" to his client files, emails, and
other information. But Ashton still did not disclose all of
his documents. ...