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Springfield adviser slapped with cease and desist order

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Missouri Secretary of State Robin Carnahan has issued a cease and desist order against a Springfield investment adviser for allegedly misleading senior citizens into purchasing insurance products without fully disclosing details of transactions, leading to fraudulent dealings.

According to the order, Tracy Mitchell, through Guidepost Financial LLC, used free lunch investment seminars to recommend and sell equity-indexed annuities - those that earn interest that is linked to a stock - without disclosing significant details, including the amount of time the investors' money would be tied up, the financial gain he stood to make on the sales and information regarding cheaper, less-restrictive investments that could have been made instead.

Carnahan said in a phone interview that Missouri law requires that financial advisers look out for the best interest of their clients, putting the clients' interests first and disclosing conflicts of interest, which Carnahan's office believes did not occur in the Mitchell case.

"This particular situation with Tracy Mitchell is one that was just a classic example of a person who is out there trying to make large commissions," she said, adding that Mitchell allegedly recommended the misleading insurance options to all but one of 32 attendees at the free lunch investment seminars.

According to the cease and desist order, Mitchell conducted six seminars from October 2008 to July 2009. Mitchell and one of the companies he does business through - Guidepost Financial LLC - could face more than $70,000 in penalties and costs. Carnahan's office also is seeking to suspend or annul Mitchell's investment adviser representative license. Mitchell and Guidepost Financial LLC have 30 days to request a hearing and contest the claims.

Carnahan said schemes targeting senior citizens occur all over the state, but southwest Missouri is attractive to scam artists because of the number of retirees and its patterns of quick development.

The Mitchell order follows a cease and desist order announced last week against Branson West man Darin Hustead and his Freedom Ridge Partners LLC, who allegedly sold Branson real estate investments to two Kansas City senior citizens, funneling their investment dollars instead into loans for himself and his family.

"Seniors are looking to protect the nest egg that they've built up in a responsible way," Carnahan said. "They're the place where the money is."

Carnahan said common sense is solid protection for investors.

"If it sounds too good to be true, it probably is," she said. "Be particularly suspect of people who are offering things like free lunches to get you in the door to sell you something."

One of the primary roles of the secretary of state's office is to protect people from investment fraud.

Two avenues are available for education on investments and investment schemes - or the free Investor Protection Hotline, 1-800-721-7996.[[In-content Ad]]


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