Rogers firemen pension board hears investment proposals

ROGERS -- The Firemen Pension and Relief Board failed to come to a decision on an investment firm after hearing proposals from five companies Thursday.

The board accepted a $27,535 settlement from its current investment firm Stifel, Nicolaus & Company on July 14. The settlement included about $25,000 an employee invested at a higher rate of commission than is "fiduciary responsible," said Kenneth Williams, vice president of the company.

Meeting

The Firemen Pension and Relief Board will meet to discuss the contracting of an investment firm at 10 a.m. Wednesday at Rogers City Hall, 301 W. Chestnut St.

Source: Staff report

Williams presented during the meeting along with Andrew Hardie, the former employee accused of misinvesting. Representatives from Stephens Capital Investment, Arvest Bank and WealthPath Investment Advisers also presented.

Hardie, who's now with Willbanks Securities, said he was forthcoming with the board about his investments including his investment in "L shares" which include a 1 percent commission.

Williams previously said "Class L" shares weren't the proper investment for the size of the pension fund. He said the investment should have been in "Class A" shares that give investors a 0.25 percent commission.

It was a good decision to invest in the Class L shares because of the market at the time, Hardie said.

"The returns made in the pension fund support the investment decision," Hardie said. "The pension fund is higher because of that."

Hardie declined to comment to the media about details of the investment. He said legal advisers have instructed him not to answer questions.

Each time you start for a new company an extensive background check occurs, Hardie said during the meeting. He said he has worked for three companies.

"Through those reviews I have never been sanctioned, fined or penalized," Hardie said.

Williams said Hardie's investment was discovered after he was terminated in April after failing to disclose his income taxes.

Hardie said his taxes were being withheld from his paychecks but he was unaware his wife's taxes weren't being withheld. He said his family worked to fix the error as soon as they were alerted of the problem.

Several customer disputes against Hardie have been recorded with the Financial Industry Regulatory Authority. The authority is a nonprofit company overseeing the investor industry, according to its website.

The disputes date back to 1995, according to the authority. It states A.G. Edwards paid a customer $29,217 after a customer alleged unauthorized and unsuitable trading by Hardie. Another four complaints are listed on the website with at least one other including a settlement in 1999.

Williams said his company alerted city officials immediately after learning about the Class L investment. Their settlement included three percent in interest. The settlement also removed the company from any legal action brought forth by the city because of the investment.

Casey Wilhelm said there's about $8.3 million in this particular investment portfolio. She said firefighters in the city were required to change to a different pension fund in the 1980s. The last of the firefighters in this pension fund retired in 2011.

There are 29 retired firefighters who receive a pension from the portfolio, Wilhelm said. She said they receive between $15,000 to $37,000 annually. Another four spouses are receiving benefits, she said. She said part-time volunteers are receiving about $1,200 annually from the fund.

Each of the firms presented for 30 minutes. The board went into executive session following the presentations to discuss contracting one of the firms that presented during the meeting.

Mayor Greg Hines announced the board wouldn't make a decision once it returned to a public session.

"Many board members would like to review the documentation," Hines said.

NW News on 07/24/2015

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