WILMINGTON, NC (WWAY) — The North Carolina Secretary of State’s office has told Sen. Thom Goolsby (R-9th District) and a business partner to stop their work as investment advisers.
The Secretary of State Securities Officials issued a Final Consent Order in a case involving the Empowered Investor Inc., which was owned by Goolsby and James Upham.
The order was issued after Secretary of State Division of Securities investigators found that the company and the two investment advisers marketed an investment strategy they termed the “10-20-50 Plan.” According to a news release from the Secretary of State’s office, the plan supposedly invested clients’ money in a way where investments losing more than 10 percent would be sold to prevent further loss, investments earning more than 20 percent would be sold to capture the gains, and no more than 50 percent of the clients’ accounts would be invested in securities at any one time. Investigators determined this plan frequently was not followed, resulting in greater client losses than if failing investments had been sold once they suffered a 10-percent loss. Investigators also found clients were not told their money was being invested in a way that was different than being advertised.
As part of the consent order, the company and the two investment advisers had their investment adviser registrations revoked by the Secretary of State’s Office. The order also requires the three parties to wait 10 years before seeking to register as investment advisers again.
Empowered Investor Incorporated, Upham and Goolsby were also ordered to cease and desist from engaging in any practice involving securities or financial services business in North Carolina.
“I have no personal comment on the consent order I signed several months ago after the business was closed,” Goolsby wrote in a text message to a WWAY reporter. Instead he shared a statement from his attorney Melissa Gott.
“This is a business that was ultimately not a success,” Gott’s statement read. “Thom Goolsby dedicated a great deal of energy and his own money in this venture. He never received even one paycheck. However, he worked hard to see to it that all the debts of the corporation were paid and investors compensated. That’s just the kind of person he is. Thom Goolsby was never a registered investment advisor. For many months he co-hosted a radio show where he talked about trading in the stock market. A lawsuit was filed last year and quickly dismissed. The parties later amicably resolved all matters.”
In that lawsuit, 10 clients claimed they lost tens of thousands of dollars through Empowered Investor. H. Mitchell Baker III, an attorney for the plaintiffs, said he and his clients could not comment on today’s news because of the terms of the settlement, but Baker told WWAY “all claims were resolved to the satisfaction of all parties.”
Goolsby, who was elected to the North Carolina Senate in 2010, announced earlier this year he would not seek a third term in office. He has said he wants to spend more time with his family and on his Wilmington law practice.
Upham told WWAY this morning he would like to talk about the consent order. He said he had to check with his attorney first. He has not yet called back.