Just out of curiosity I did more digging.
Here is a link to the SEC's regulation of Investment Advisers published in April of 2012.
http://www.sec.gov/about/offices/oia/oia_investman/rplaze-042012.pdf
It states that investment advisers are regulated under the 1940 U.S. Investment Advisers Act of 1940 which came about as a way to regulate the financial industry which congress felt contributed to the stock market crash of 1929 and great depression.
The Act defines a "financial adviser" as:
"Any person or firm that:
- For compensation
- is engaged in the business of ;
- providing advice to others or issuing reports or analyses regarding securities
It defines "engaged in the business of" as:
"whether the person receives compensation that represents a clearly definable charge for providing investment advice"
The SEC has expanded on what it classifies as advice on securities. It considers advice on securities any of the following:
- Advice about market trends
- advice aboout the selection and retention of other advisers is advice about securities
- Advice about the advantages of investing in securities versus other types of investments (e.g.,coins or real estate)
- Providing a selective list of securities is advice about securities even if no advice is provided as to any one security
- asset allocation advice is advice about securities
Seems a bit damning for Dillard doesn't it?
The act also provides a list of exceptions on people that are exempt. One of these is that of a "publisher". I think that Dillard could make a compelling argument that he is not classified as a financial adviser because he's a publisher except for one thing, the promotional nature of EVG. Here is what the Advisers Act says:
"Publishers. Publishers are excluded from the Act, but only if a publication: (i) provides only impersonal advice (i.e., advice not tailored to the individual needs of a specific client);
27 (ii) is “bona fide,” (containing disinterested commentary and analysis
rather than promotional material disseminated by someone touting particular securities); and (iii) is of general and regular circulation (rather than issued from time to time in response to episodic market activity).28"
Dillard even acknowledges that EVG recommended Pousa in his open letter to EVG members after this whole debacle. He stated:
"Our goal in EVG is to empower people, and to help them increase their levels of prosperity and wealth in their lives, so having to deal with this kind of loss
from one of our recommended resources has been gut wrenching."
The act even talks about foreign advisers (AKA Pousa) not being exempt from SEC reach.
At the very least, doesn't this seem like Dillard is operating unlicensed?
