Accused adviser’s former employer pays restitution

Two Carthage couples and a Joplin woman, all former clients of adviser Mark L. Henry, joined Carnahan in Springfield to make the announcement.

State authorities say Henry mishandled approximately $800,000 in clients’ funds. In November 2006, the Securities Division of Carnahan’s office issued an order accusing Henry of opening an unauthorized personal bank account and using it to conduct business as Investment Centers of America Inc., the firm that Henry sold securities through from October 1994 to September 2005. He allegedly used the account to collect clients’ funds during and after his employment with ICA. Henry operated his business from offices in Carthage.

Carnahan said Appleton, Wisc.-based ICA faced improper supervision charges in the case before entering into the agreement. In the Nov. 9 consent order, ICA agreed to pay $788,000 in restitution; $200,000 to the Missouri Investor Education and Protection Fund; a civil penalty of $25,000; and $18,500 for the cost of the investigation. ICA must also hire an independent consultant to oversee company policies and procedures.

Henry never responded to the Securities Division’s charges against him and owes more than $28,000 in penalties and costs, Carnahan said. The matter has been turned over to the Attorney General’s office, she said.

Henry pleaded guilty Nov. 13 to federal securities fraud and tax fraud charges filed in the U.S. District Court for the Western District of Missouri. Henry could face prison time and fines when he is sentenced.

In April, a group of investors filed an involuntary bankruptcy petition to force Henry into Chapter 7 bankruptcy.

Matt Kitzi, Carnahan’s commissioner of securities, said Thursday that most of the investors who invested funds while Henry was with ICA and approached the Secretary of State’s Office have received restitution, Kitzi said. The office knows of two investors who are pursuing restitution through arbitration and mediation outside of the office’s jurisdiction, he said.

The office will continue to work to help those clients, Kitzi said.

“It is an uphill battle to try to collect funds when they are taken in a situation like this,” Kitzi said.

Carnahan thanked Barbara Lane, of Joplin, for alerting the state to Henry’s activities. Lane said she instructed Henry to purchase stock in 2005 and never received a certificate or dividend. She later recovered the money from Henry, but her suspicions led her to call Carnahan’s office.[[In-content Ad]]