After criminal case, Cavner et al called on civil charges

Prominent Springfield financial adviser Nadia Cavner is facing a new round of fallout connected to her recent felony stalking guilty plea, and parties who worked closely with her are now named in a lawsuit, too.

While it remains unclear whether Cavner is still on the hook to lose her ability to sell securities for 10 years, the adviser and others were hit with a civil suit last month from her college-age daughter’s ex-boyfriend, Patrick McFarland, and his girlfriend, Kristen Stancher.

McFarland and Stancher filed an 85-page civil suit in Greene County Circuit Court on Oct. 17 against Cavner and other parties, including Cavner associates Khulan Denny and Rodney Stafford, as well as Tupelo, Miss.-based BancorpSouth Inc. (NYSE: BXS)

In April, Cavner pleaded guilty in federal court to a felony interstate stalking charge in Memphis, Tenn., acknowledging intentions to injure, harass or intimidate McFarland. On Aug. 26, U.S. District Judge John Fowlkes Jr. sentenced Cavner to five years of probation and six months of home detention.

According to securities regulations, a felony would statutorily disqualify Cavner from selling securities in the U.S. for a decade. Financial Industry Regulatory Authority spokeswoman Michelle Ong has said financial advisers can appeal FINRA’s disqualifications and licenses are not pulled until an independent board conducts a full review.

Anonymous sources who contacted Springfield Business Journal and TV media partner KSPR informed the newsrooms Cavner’s regulatory license hearing was held Nov. 7.
Ong, who said the proceedings of the regulatory body are not open to the public, would neither confirm nor deny whether a hearing has taken place.

“If a hearing had taken place, it could take a couple of months before the decision is out,” she said.

According to FINRA, a statutory disqualification committee comprising eight securities industry members and two nonindustry representatives, would meet after an eligibility hearing to consider the adviser’s application to continue selling securities. The committee then sends its decision to the National Adjudicatory Council, which typically makes the final decision on FINRA’s behalf. However, the FINRA Board of Governors could call the matter for review.

If FINRA approves an application, the U.S. Securities and Exchange Commission must review and approve that decision before it takes effect. In most cases, the SEC’s review and approval takes 30 days, according to FINRA. In some cases, SEC scrutiny could extend the case to 60 days or longer.

If FINRA denies Cavner’s application, she would have the right to appeal to the SEC, and that process could take several months or more.

Cavner declined to be interviewed for this story and would not confirm whether a hearing has been held or scheduled.

According to her broker profile at FINRA.org, Cavner remains licensed to sell securities. Cavner, who has passed Series 7, 24 and 63 exams, is not currently suspended or inactive with any regulator, according to the site.

The status of the criminal disclosure on BrokerCheck.FINRA.org is listed as “final,” and a summary statement says the criminal activity was “regarding conduct unrelated to any financial matters or investment advisory duties.”

In the civil case, a total of 20 counts are charged, each calling for judgments in excess of $25,000.

According to allegations common to all counts, McFarland was in a relationship with Cavner’s daughter prior to March 2011. He began to have an intimate relationship with Stancher, and after he broke up with Cavner’s daughter, the civil suit claims Cavner utilized her status with BancorpSouth and recruited others to cause “direct economic, bodily and emotional distress” to the plaintiffs.

Representing McFarland and Stancher in the case, St. Louis attorney Douglas Rudman said he was not prepared to make a statement on the case.

“I’m afraid it would be very glib in light of the magnitude of the causes of action set forth in the petition,” Rudman said. “This was not a singular event.”

According to court documents, between July 9, 2011, and Nov. 15, 2011, McFarland and Stancher allegedly received harassing communications that included demeaning, slanderous and defamatory material from unknown sources acting on behalf of Cavner. According to the filing, BancorpSouth is vicariously liable because its agents used the bank’s resources to harass the plaintiffs.

BancorpSouth spokesman Randy Burchfield declined to comment on the lawsuit, citing a bank policy.

Days after disassociating with BancorpSouth, Cavner in early May opened her own investment services firm at 2620 E. Normandy St., Ste. 108, immediately southeast of the 2620 E. Sunshine St. BancorpSouth branch where she practiced for eight years.

As part of the Springfield Business Journal’s 12 People You Need to Know series, the financial consultant known for managing roughly $490 million in assets for some 1,100 households said in May she was not worried about the regulatory hurdles she faced.

“I’m very confident I’ll get to maintain my license,” she said. “I wouldn’t be opening my own firm if I didn’t have a license.”

No hearings were scheduled in the case as of Nov. 14, according to online court records.[[In-content Ad]]