Gig Harbor financial advisor fined, barred by SEC

A Gig Harbor financial advisor has been penalized by the federal Securities and Exchange Commission for failing to disclose his financial interest in a firm selling chancy securities he had urged clients to buy. The firm, Aequitas Commercial Finance, collapsed spectacularly in 2016, leaving customers owed millions.

In a settlement announced this week, Gary Price, 50, principal of Genesis Capital LLC of Gig Harbor, agreed to pay $142,000 in penalties and be barred for a year from engaging in any investment or securities dealings.

The SEC said Price had failed to inform investors that he had “significant financial ties” to Aequitas, a Lake Oswego, Ore., firm also known as AFC.

Between 2013 and 2016, the SEC said, Price’s customers put at least $8 million of their money into various Aequitas investments, according to The Oregonian.

What Price did not tell his customers, investigators said, was that he held ownership stakes in two Aequitas-affiliated businesses that together received $3.6 million in loans and a $10 million line of credit from AFC.

At the same time, the SEC said, Price received kickbacks from another Aequitas affiliate for steering investors to ACF.

Price consented to a cease-and-desist order and agreed to pay “disgorgement” and interest of $67,033 and a civil penalty of $75,000.

The order also bars Price from association with any broker, investment advisor or other securities dealer for a year. He can apply for reentry after that, the SEC said.

Price could not be reached for comment. No one answered the phone listed for Genesis Capital, and its web site has been taken down.

The settlement marks Price’s second tangle with the SEC. In 2014, the commission charged another of his companies, Strategic Capital Group LLC, with false and misleading advertising and engaging in “principal transactions” —essentially selling client’s securities to itself and taking a cut.

Strategic Capital paid nearly $600,000 to settle the SEC’s charges, and Price paid a $50,000 personal penalty.

The Oregonian, which has reported extensively on the Aequitas collapse, said in a story Monday that “Price is the latest in a series of high rollers brought low by the stunning collapse of Aequitas in 2016.”

Bob Banks, a Portland lawyer who represented angry investors, told the Oregonian, “Given the tremendous hardship and suffering that Mr. Price … inflicted on investors, he cut himself a pretty good deal.”

“Mr. Price and other advisors sold toxic Aequitas investments because they made a lot of money doing so, in blatant disregard of their obligations to put their client’s interest first,” Banks told the Portland newspaper.

Earlier this year, two Aequitas executives, co-founder Brian Oliver and former chief financial officer Olaf Janke, pleaded guilty to charges of fraud, the Oregonian reported.

According to the SEC, Aequitas sold nearly worthless private notes by wining and dining financial advisors — and sometimes offering to pay them outright — for steering investors their way.

Price was among those who took the money, the SEC said, often laundered through a complicated web of companies, including one called RP Capital and another called Aspen Grove.

The Oregonian reported that a court-appointed receiver tracked more than $1.2 million in payments from Aequitas to more than 15 investment advisors around the country. More than half of that money went to RP Capital or other companies affiliated with Price.

This story was originally published August 7, 2019 at 12:00 AM.