SEC takes Greenville firm to court

GREENVILLE - From a small building in Greenville, the Securities and Exchange Commission believes Wealth Management LLC's CEO James Putman of Menasha and former president Simone Fevola of Appleton took part in an old-fashioned kick-back scheme, where both men each pocketed at least $1.24 million in 2006 and 2007 from their clients' investments.

In its filing with the federal court the SEC says the two men had their 400 plus clients invest about $102 million in six unregistered investment pools since 2003.

"They have real investments, but the investments are both illiquid and high risk in nature. Not the sort of thing that most of the investors bargained for," said Robert Burson of the Securities and Exchange Commission.

Specifically the complaint alleges that in regular reports to investors Wealth Management reported generally positive, remarkably consistent returns in those funds, when in reality the SEC says they were "risky and speculative" investments such as in a water park and an oil drilling company.

The complaint goes onto say "Putman recently admitted to two investors that their accounts, both with reported values exceeding $600,000 may be worthless."

Several of Wealth Management's clients, the complaint says are elderly retirees who sought safe low-risk investments.

A federal judge has since frozen the assets of the firm and has appointed a receiver to analyze the company's affairs.

Putman has said he has been cooperating with federal authorities, and in a statement offers "sincere apologies to Wealth Management clients and staff for the concern and controversy this is causing."

Fevola, who resigned last October could not be reached for comment. His lawyer wrote FOX 11 saying "We believe the evidence will show that Mr. Fevola acted in good faith and in the best interests of his clients in making investment decisions."

The Court filings state both men have signed promissory notes, telling the SEC they're willing to pay back the $1.24 million in kickback payments. However the SEC says the civil suit will still go forward as the complaint states the two men fraudulently overstated their funds' values, and the funds appear to have little left.

The court appointed receiver will determine how much money is actually left, and how to dispense it among the clients. Meanwhile a hearing is scheduled for Tuesday in Federal Court in Green Bay.