Court blocks accused investment adviser
U.S. District Chief Judge Helen Gillmor issued a temporary restraining order yesterday prohibiting Honolulu investment adviser Mark Teruya from violating federal securities laws.
The TRO will remain in effect until the conclusion of a preliminary injunction hearing that Gillmor will hold on Oct. 17.
The federal court order comes one week after the state securities commissioner took similar action in issuing a cease-and-desist order prohibiting Teruya from violating state securities laws, and four days after the state insurance commissioner suspended Teruya's license to sell insurance in Hawaii.
All actions stem from Teruya's alleged improper transfers of clients' assets from one type of annuity to another on their behalf. Annuities are sold and managed by insurance companies.
U.S. Securities and Exchange Commission staff attorney Sam Puathasnanon told Gillmor that Teruya, 35, and his company Senior Resources of Hawaii Inc. pocketed $2 million in fees and commissions from transfers that his clients did not authorize or know about and from transfers in which he failed to inform clients he would be receiving a 12 to 14 percent commission.
Puathasnanon said Teruya persuaded clients to sign blank or partially prepared forms and, in one case, cut-and-pasted a client's signature on a document authorizing the transfer of money from a variable annuity to a fixed, equity-indexed annuity.
Since the state took its actions, the state Securities Enforcement Branch has received 24 complaints or inquiries about Teruya, Puathasnanon said.
Attorney Mark Kawata said Teruya disputes all the allegations against him and presented the court declarations from satisfied clients. He also said there is no requirement to disclose the amount of the commission.
"Nobody lost money," he said, not even the people whose complaints form the basis of the government claims.
Gillmor said whether or not clients are satisfied with Teruya's actions does not mean violations did not occur.
Kawata argued that a TRO is not necessary because the state's cease-and-desist order essentially accomplishes the same thing.
However, Teruya has already asked for administrative review hearings challenging the state's order and the suspension of his license. Kawata said he is also asking a state judge to issue a TRO against the state blocking it from suspending Teruya's insurance license.
A hearing is scheduled for Thursday.