The porn kingpin who sank Charlotte financial pro
Plus: N.C. economy still humming; Bruton Smith's $200K raise; Apple to introduce a 'Netflix killer'
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Good morning! Today is Monday, March 25, 2019. Here are today’s big stories in Charlotte-area business news:
Local TV’s ‘retirement coach’ accused:
Folks, there’s an interesting story starting to emerge that’s worth keeping an eye on.
John Downey of the Charlotte Business Journal did a great job breaking this story on Friday afternoon: “Charlotte investment advisor swept up in national fraudulent loan scandal.” That careful headline doesn’t do justice to how fascinating this story actually is. And it could be big, too, with people from the Charlotte area potentially losing millions.
If you examine the story a little more closely and dig around, it goes something like this: Sharks are circling around a high-profile financial adviser — who appeared regularly on Charlotte TV and radio programs — following accusations that he sold unregistered securities on behalf of a Florida company that is 1) in bankruptcy, 2) under investigation by the SEC and 3) headed by the former owner of Playgirl, High Society and Cheri.
And the Charlotte broker? Oh, he apparently closed his office and left town.
WHO: The Charlotte financial adviser is Jim Heafner, president of Heafner Financial. If that name sounds familiar, it’s because Heafner has been hard to miss on Charlotte radio and TV the last couple years. On those stations, hosts lauded him as a “financial guru” and “the Carolinas’ retirement coach,” but the segments actually resembled paid infomercials, often with Heafner Financial’s phone number at the bottom. He had a weekly segment on WCNC’s “Charlotte Today” and also appeared on morning shows on WBTV and WSOC. WBT radio even named its studio after his company last year:
Heafner (left) at WBT radio studio named after his company. Motto: “You’ll just know.”
An online bio says Heafner grew up in Lincolnton and went to UNC Chapel Hill before starting several businesses.
WHAT: Heafner is accused of selling unregistered securities on behalf of 1 Global Capital. That’s not necessarily improper, but the SEC says in a civil filing that 1 Global misrepresented the investments as safe for retirement accounts — when in fact 1 Global used the money for risky investments and diverted some of it to other businesses and to cover its CEO’s “lavish expenses such as a luxury vacation to Greece and monthly payments for his Mercedes Benz.” In the three months before 1 Global’s July 2018 bankruptcy filing, the company paid Heafner “finder’s fees” of about $34,000, court documents show — one of nearly 60 people paid such fees. Nationwide, the SEC says, 1 Global fraudulently raised $287M from 3,400 investors.
It’s not clear what if anything Heafner knew about the securities he was selling on 1 Global’s behalf or how he represented them to clients. Nobody answered the phone when we called Monday morning.
ACCUSATIONS: The brokerage industry’s regulatory body, FINRA, lists three arbitration claims against Heafner totaling nearly $500,000 in relation to the sale of 1 Global securities. At least one complaint is from a North Carolina resident. One complaint alleges Heafner’s recommendation to invest $100,000 in 1 Global “was an unsuitable investment recommendation, and Heafner also failed to disclose material facts which was a breach of fiduciary duty, a breach of contract and gross negligence.” An affiliated company listed in the complaints, Georgia-based TCM Securities, denies wrongdoing. The Biz Journal reported that plaintiff’s lawyers are on the hunt for Heafner clients. Yikes.
LEAVING TOWN: The story gets weirder. Former WBT radio personality Keith Larson, who used to do publicity for Heafner, wrote in a long Facebook post this month that he heard Heafner closed his Charlotte office near Providence Road and I-485, “leaving his business operation and employees hanging,” and took off. Heafner, Larson wrote, “no longer resides in the continental United States.” (I’m no bounty hunter, but I’d start looking in Alaska or Hawaii. Probably Hawaii.)
EXPOSED: The most colorful character in this whole episode might be the former CEO of 1 Global, Carl Ruderman. Trade pub deBanked explains:
Ruderman used to own Playgirl beginning in 1986, and he was something of a kingpin in the pornography world after his huge success in the phone sex industry. Unlike limelight-loving porn titan Hugh Hefner, Ruderman tried to keep a low profile, which eventually earned him the nickname “Porn’s invisible man.”
He was not without enemies, however. In November 1983, Larry Flynt’s Hustler porn magazine reportedly awarded Ruderman the title “A—hole of the Month.”
It’s all an interesting and sordid tale, with more details likely to emerge — especially if local news stations are interested in looking into one of their former advertisers.
NC economy rocks on:
North Carolina’s unemployment rate ticket up to 3.9 percent in February, and the state added 3,800 jobs, according to figures released Friday. In a research note, economists at Wells Fargo say all looks good:
While hiring moderated in February, we see no sign that North Carolina’s economy is losing momentum. Nonfarm employment has risen 1.5% over the past year, with gains evident in every key industry segment.
Bruton Smith: $200K raise at Speedway Motorsports
Bruton Smith took home a raise last year as executive chairman of Speedway Motorsports, according to securities documents filed Friday. His total compensation hit nearly $2.5M in 2018, up from $2.3M in 2017 — largely because of an increase in incentive compensation.
The company’s two other top execs got raises, too:
Marcus Smith, CEO: $2.5M in 2018, up from $2.4M a year earlier.
William Brooks, CFO: $2.2M in 2018, up from $2.1M.
You’ll recall that Bruton Smith took a $1M pay cut for his work last year at Sonic Automotive, so the Speedway Motorsports raise provides some salve for that wound.
Between the two companies, Smith’s total compensation was $5.8M in 2018.
Full Speedway Motorsports pay info here.
Tweet of the day
Get off my lawn (digital edition):
Carolinas & Beyond
No flight cancellations here: The grounding of Boeing 737 Max planes is not affecting flights at Charlotte/Douglas International Airport, American Airlines told the Observer. The airline said over the weekend that it is canceling about 90 flights per day nationwide. Boeing and federal regulators are examining the safety of the plane following two crashes in the last five months.
The latest cool thing from Apple: Apple is expected to unveil new video- and news-subscription services at a press event in California today. According to the Wall Street Journal, Apple will show footage from its new original TV shows, which will be “delivered in a new TV app that staff have been calling a Netflix killer.” It also plans a new service costing $9.99 a month that will allow users to read more than 200 national magazines plus newspapers including the WSJ — but not the New York Times or Washington Post.
Taking stock
Unless you are a day trader, checking your stocks daily is unhealthy. So how about weekly? How local stocks of note fared last week (through Friday’s close), and year to date:
And that’s a wrap. May your day be as thrilling as the end of yesterday’s Hornets’ game:
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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.