Heafner: Investment disaster ‘couldn’t have been foreseen’
Plus: Hemp craze spreads to Hallmark and SouthPark; BB&T CEO buys $1.3M Charlotte condo; Golf shirts ruffled in epic UNC-USC tailgate brawl
|Tony Mecia||Sep 4, 2019|
High-profile financial adviser Jim Heafner says he, too, lost ‘significant’ money in investment that will be ‘the one black mark on my career’
Financial adviser Jim Heafner — who dispensed retirement advice frequently on Charlotte radio and TV stations — says he feels horribly about steering clients toward an investment in a Florida company that the SEC has accused of fraud. But he says he doesn’t know what more he could have done.
“I wish I had never heard of 1 Global,” he said. “Other than that, my practice was terrific. We were well-known, we had the ear of the market, we had some great clients. We really helped a lot of people. I really enjoyed what I did. I never thought I’d retire, but I never had migraines until this.”
In a wide-ranging phone interview with the Ledger, Heafner at times sounded saddened that he had let his clients down by recommending that they invest in 1 Global, which he says at the time appeared to be a reputable company that helped businesses gain access to capital. The SEC later said that 1 Global fraudulently raised nearly $300M from more than 3,400 investors and channeled millions to its CEO, a former porn publisher named Carl Ruderman, in part to fund “lavish expenses such as a luxury vacation to Greece and monthly payments for his Mercedes Benz.” Ruderman last month agreed to settle his SEC case and pay $33M in profits he made from the venture.
Many investors did not receive their money back, though they could recover some of it as a part of 1 Global’s bankruptcy proceedings.
Local effect: Heafner said he estimates that about 50 of his 600 clients had money in 1 Global at the time it filed for bankruptcy protection last year. Three of those clients have filed complaints with FINRA, the securities industry’s regulatory body, alleging that Heafner’s investment recommendations were unsuitable and resulted in losses of between $100,000 and $238,000 each. Records show that in July, Heafner and FINRA investigators reached a settlement barring Heafner from “associating with any FINRA member firm in any capacity.”
Jim Heafner of Heafner Financial appeared regularly on Charlotte TV and radio, like here in 2017 with WSOC’s Laura Palka. Some former clients have complained about unsuitable investments, but Heafner tells the Ledger he put clients first and that most were satisfied with his work.
At times, Heafner also sounded frustrated, especially when discussing additional allegations made against him last month in a lawsuit involving Baker Wealth Management, the firm Heafner agreed to transfer his clients to for $600,000 last year just a few months after the 1 Global investments came to light. (The Ledger disclosed those allegations last week.) Baker has balked at paying the full price, saying Heafner’s inappropriate investments soured some clients on working with him.
Asked about Baker’s allegations, Heafner said they’re just part of Baker’s attempt to wriggle out of a deal: “There’s not one bit of truth anywhere in there. … If they lost clients, it’s because they lost them.”
Heafner, 70, now lives in Puerto Rico. Other highlights from Heafner’s interview with the Ledger:
On dealing with clients: “Everything we sold, I think, is appropriate. But the one thing was 1 Global. I have always acted in my clients’ best interests. I’ve never done anything that would reward me financially over a client’s future. It doesn’t mean I haven’t made mistakes. It doesn’t mean markets haven’t gone down. 1 Global was presented as a great opportunity for clients.”
On his evaluation of 1
Global: “It looked solid as a rock. I put all my free cash in there – which was not a small amount as well – because it was a great deal for the short term. It was secured by assets or receivables or something solid. Now, the SEC says that wasn’t quite true and the audited statements they promised they were giving you weren’t really audited. So what’s true, we don’t know.”
On how much money he lost: “It’s significant.”
On whether its sensible to have retirement money in annuities, which pay high commissions to people like Heafner who sell them: “It is a high-commission product relative to the commission I make in one year on managed money on a stock or bond. But if I have that client for 10-20 years, I’m making a lot more having them in the market than in annuities. In fact, they call annuities ‘annu-icide.’ It suicides your commissions because it’s one and done. So the commission sh— is bull.”
On why he moved to Puerto Rico: “People say, ‘You moved to Puerto Rico to run away.’ Puerto Rico is part of the United States! It is subject to federal law. It is under the SEC’s jurisdiction. I’m not escaping anything by being here. We made a commitment some years ago that when we retired, we’d spend some time in Puerto Rico to help the economy out here. … This is for the year. Next year, we’ll see what we do. We didn’t escape anything by coming here.”
On what he’s up to nowadays: “I still am dealing with these issues with Baker and so forth. I’m retired. I go to the gym every other day. I walk my dogs in the mornings and try to do some fun things. But it will be some time, I think, before we are done dealing with all this mess.”
Charlotte CBD takeover continues
How’s this for a new slogan for Hallmark: “When you care enough to send the very best hemp.”
One of the few remaining Hallmark stores in Charlotte sent an email to customers last week saying it, too, is joining the CBD craze. Amy’s Hallmark at Cotswold wrote that it now stocks CBD-infused bath bombs “and more.” The email said: “You spend so much time caring for others. We’ll help you care for yourself.”
CBD is going so mainstream that it’s even invading SouthPark:
Over the long weekend, a Snapchat user posted a video professing amazement that every table at SouthPark Mall’s food court had an ad for Seven7h Sense Botanical Therapy, a new CBD shop at the mall that sells a “high-quality line of specially designed body and skin care products, made with essential oils and CBD — the finest gifts nature has to offer.”
Blue Flowers, “an upscale CBD boutique,” opens Saturday at the corner of Sharon and Fairview roads (by the Burger King and Oak Steakhouse).
The bigger picture: Big retailers including Harris Teeter and Earth Fare have been adding hemp products to their shelves recently — though they are playing catch-up to local specialty shops such as Infinity’s End, Berrybrook Farm and Your CBD Source, the Ledger reported in June.
UNC-USC tailgate brawl video features ‘Brads vs. Chads’
A big fight before last weekend’s North Carolina-South Carolina football game received some national social-media attention over the weekend.
Because the participants were mostly young white guys in golf shirts, the melee soon became labeled the battle of Brads vs. Chads. It appears to have been filmed somewhere in the Morehead Street corridor and was tweeted out by websites including Barstool Sports and Total Frat Move:
Another angle, posted on a Reddit discussion group devoted to fight videos, was captioned “Chill Kyle” and shows uptown in the background:
Online comments included:
“So many backwards hats, Khaki Shorts and sport polos were damaged in the making of this film.”
“Vineyard Vines is really going aggressive with this marketing campaign”
We are aware of the video posted on social media which depicts multiple individuals fighting at an outside location, and we are looking into it. We responded to several disturbance and fight calls that afternoon in the uptown area. That particular 911 call specifically indicated that multiple people were fighting in a “tailgate area.” When our officers arrived, no one was observed fighting and no one reported being assaulted or injured.
Ballantyne theater depicted as hip office
New renderings available online are providing fresh evidence to the idea that the Ballantyne Village theater’s days might be numbered.
The Ledger first reported in June that the website of real-estate giant JLL seemed to list the theater space as available to rent as an office. Now, there are additional renderings on the website, and they include the signature “spaceship” top of the building:
There’s even what appears to be a rooftop bar and lounge:
Nobody involved is talking about any plans, but judge for yourself.
Bonus observation: Other parts of town are awash in “adaptive re-use,” which is developer lingo for finding new uses for old buildings (instead of the traditionally preferred tactic of knocking down old buildings and starting from scratch). Think of textile mills converted into loft apartments. Who would have thought such a trend might spread to Ballantyne?
New mortgage? BB&T CEO Kelly King has a new Charlotte home in the banking-exec stronghold of Myers Park. Property-tax records show he and his wife bought a luxury condo on Roswell Avenue near Myers Park Country Club. [corrected on 12/6/19 at 9:40am] The 2,800 s.f. condo has 3 bedrooms, 2.5 baths and a fireplace. Sales price: $1.3M. BB&T is based in Winston-Salem, but it is merging with SunTrust, and the HQ of the new Truist Bank will be uptown.
Atrium still expanding: As it continues to plan for a medical school in Charlotte, Atrium Health is moving forward with what looks like a big overhaul of its campus in the Midtown-Dilworth area. The health giant has filed to rezone 70 acres, which would allow it to add senior housing and hotel rooms, improve the nearby greenway and realign some of the site’s roads off South Kings Drive and Scott Avenue. (Biz Journal/paywall)
Studying on the ski slopes: Students at Lees-McRae College in Banner Elk can enroll for the first time this fall in a minor in Ski Industry Business and Instruction, which the college says is the only minor of its kind in the Southeast. The program is offered in partnership with Beech Mountain Ski Resort and “includes classes such as contemporary issues in the ski industry, winter adaptive adventure recreation, outdoor recreation administration, and outdoor emergencies for ski resorts.” (Hat tip: Business NC magazine)
Interesting list, Part 1: “Complete list of all 8 Charlotte MBA programs with tuition.” (Agenda)
Interesting list, Part 2: “Top 10 country clubs in Charlotte, ranked — including pricing data.” (Agenda)
Who’s from Charlotte, anyway? Just 41% of Charlotte residents were born in North Carolina, lower than the national average of people living in their home states (58%). “The two ZIP codes with the lowest percentage of natives, meanwhile, are 28202 and 28277 — aka uptown Charlotte and Ballantyne. Both are less than 30% native.” (WFAE)
This week in podcasting
A round-up of interesting moments in recent Charlotte podcasts
In-depth journalism: Jourdan Rodrigue, recently hired away from the Observer to write for the subscription-based sports site The Athletic, says she likes writing in-depth features on the Panthers and that The Athletic has an elegant design: “It’s not interrupted by auto-play videos. It’s not interrupted by pop-up ads.” She had earlier told the Charlotte Newsmakers podcast (Aug. 19) that now she can write articles without being “asked in editorial meetings how much traffic do we think that story will drive, what kind of clicks do you think that story will get” and observed that “newspapers are all starting to pivot to these various buzzwords and company mandates that aren’t seeming to work.” She also debated with hosts Miller Yoho and John Short the following hypothetical: “Would you rather have prohibitive construction on South Boulevard for the rest of your life … or would you take a full-out, game-speed, no-pads hit from Luke Kuechly?” (The Charlotte Podcast, Aug. 27, 34 minutes)
Cuban near-death experience: Charlotte businessman Felix Sabates discusses the dangers of socialism with former Gov. Pat McCrory and says he was almost killed as a teenager at the hands of Cuban revolutionaries: “I was in a truck. There were 12 of us. My father and the bishop found out that I was in that truck, and they stopped the truck to get me out of it. A mile down the road, the other 11 guys that were left in the truck got killed. … [My dad] knew that things were going to turn ugly if we went to the hills to go fight against Castro.” (Inside the Game of Politics with Pat McCrory, Aug. 17, 18 minutes)
Building a business: Host Erin Breeden chats with Corri Smith, founder of Charlotte marketing firm Black Wednesday, about the challenges of building a business. Smith on when it’s the right time to start a company: “It’s never the right time, and therefore it is always the right time. You’ll never actually be ready. I think people wait for some magical moment, or they think they’re going to wake up one day and feel ready, and it’s like, no, you won’t. So don’t wait for that feeling.” (The Advent CoWorking podcast, Aug. 28, 38 minutes)
Uptown’s animal instincts: In a podcast about the future of uptown’s growth, Ely Portillo of UNC Charlotte’s Urban Institute notes that there’s a lot of vacant land in First Ward and shares the one thing outlined in early plans for center city that seems to be missing: “Just putting this out there: The original 1966 Odell plan called for a zoo in downtown Charlotte. We still don’t have a zoo. It’s been more than 50 years. I think we should look at a zoo,” Portillo joked. (Charlotte Talks, Aug. 28, 49 minutes)
Cheap getaways from CLT
This weekend: Charlotte to Trenton, $37 round-trip on Frontier (nonstop), Sept. 7-9.
This weekend: Charlotte to Providence, $76 round-trip on Frontier (nonstop), Sept. 7-9.
Charlotte to San Pedro Sula, Honduras, $247 round-trip on Spirit (one-stop), Sept. 12-20.
Charlotte to Orlando, $58 round-trip on Frontier (nonstop), Sept. 21-24.
Charlotte to San Jose, Costa Rica, $233 round-trip on Spirit (one-stop), various dates in September-November.
Source: Google Flights. Fares retrieved Wednesday morning. They might have changed by the time you read this.
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The Charlotte Ledger is an e-newsletter and web site publishing timely, informative, and interesting local business news and analysis Mondays, Wednesdays, and Fridays, except holidays and as noted. We strive for fairness and accuracy and will correct all known errors. The content reflects the independent editorial judgment of The Charlotte Ledger. Any advertising, paid marketing, or sponsored content will be clearly labeled.
The Charlotte Ledger is published by Tony Mecia, an award-winning former Charlotte Observer business reporter and editor. He lives in Charlotte with his wife and three children.