New allegations against Charlotte media’s ‘financial guru’
Jim Heafner, who dispensed financial wisdom on Charlotte TV and radio, gave bum advice to clients, legal filing says
The following article appeared in the Aug. 28, 2019, edition of the Charlotte Ledger, a 3x/week e-newsletter on local business news. Sign up here for free.
New court filings have revealed additional allegations of shoddy investment advice against financial planner Jim Heafner, a former regular on Charlotte TV and radio stations who closed his firm this year and took off to Puerto Rico.
In a court filing this month, a financial firm that had agreed to buy Heafner Financial before the allegations surfaced this spring said it had become aware of new improprieties, including that Heafner:
- “invested an 85-year-old woman’s entire net worth into an equity index annuity with a 10-year surrender, virtually locking up all of her assets in unsuitable products.”
- “did not invest over $200,000 of a client’s retirement funds. The assets earned no return during the entire period that the client had worked with the Heafner Partners.”
- “advised a client whose mother had passed away that he could pull out his mother’s annuity but did not inform him that he would incur a large amount of capital gains due to the cost basis structure of the account.”
Heafner’s lawyer, Charles Bridgmon, didn’t return an email from the Ledger on Tuesday.
The new allegations indicate that there could be many more people in the Charlotte area who received questionable financial advice from Heafner — beyond the three who filed earlier complaints with the brokerage industry’s regulatory body. A lawyer for one of those three told the Ledger in April that his client, a 62-year-old retired Charlotte bank employee, was “devastated” after the $130,000 she entrusted to Heafner turned into nothing.
Background: Heafner has been accused of selling unregistered securities on behalf of a Florida company called 1 Global Capital. The SEC has alleged that 1st Global misrepresented the investments as safe for retirement accounts, when in fact its CEO — the former owner of Playgirl and High Society — used the money to pay for “lavish expenses such as a luxury vacation to Greece and monthly payments for his Mercedes Benz.” Investors’ money disappeared. Heafner has said he believed 1st Global offered legitimate investments.
WHO: In the last few years, Heafner appeared frequently on local media. He had a weekly segment on WCNC’s “Charlotte Today” and also appeared on morning shows on WBTV and WSOC. WBT radio even named its studio after his company last year. Many of Heafner’s media appearances seem to have been paid sponsorships, though the TV and radio stations seldom indicated that they were sponsored segments.
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Many of the new allegations in the lawsuit have nothing to do with 1st Global. The lawsuit, filed by Heafner in May, seeks to force Baker Wealth Management to follow through on the commitment it made last year to buy Heafner Financial for $600,000 — before Heafner’s involvement with 1st Global was publicly disclosed. The new disclosures about Heafner are in Baker’s response to the Heafner lawsuit.
Baker says in court filings that it had no idea of Heafner’s involvement in 1st Global and that Heafner denied any problems and misrepresented the strength of his business. After receiving Heafner’s client list and a transfer of their assets, Baker couldn’t transition the clients smoothly, the company says in court documents, “because Mr. Heafner would soon flee to Puerto Rico and [Heafner Financial] would soon be out of business as a result of the public’s discovery of the Heafner Parties’ illegal conduct.”
The existence of the lawsuit was first reported Tuesday by the Charlotte Business Journal (paywall).
More details: For the full, 52-page complaint against Heafner filed by Baker Wealth Management, go to the Ledger’s website. It’s an intriguing read, as far as legal filings go. The site also has the original lawsuit filed by Heafner against Baker.
Choosing an adviser: Before selecting a financial planner, check out his or her background on BrokerCheck. In addition, understand how the adviser gets paid. Some financial products, such as annuities or certain types of life insurance, pay commissions to brokers, which creates an incentive for advisers to sell them to you.
