Securities Commissioner revokes licenses of investment adviser, firm involved in unlicensed sale of securities for medical treatments
DENVER — Colorado Securities Commissioner Gerald Rome has signed a Final Order revoking the investment adviser license of Denver Capital Management, Inc. (DCM), also known as Bearden Wealth Strategies Group, Bearden Group Wealth Management, and Bearden Wealth Management Group, as well as the individual license of Richard Lynn Bearden. DCM’s offices are in Palmer Lake, and Bearden resides in Monument, Colorado.
The revocations are a result of a decision handed down by Administrative Law Judge Robert Spencer, in which the judge agreed with the staff of the Colorado Division of Securities, part of the Department of Regulatory Agencies (DORA), that Bearden and his company have willfully violated the Colorado Securities Act by participating in the sale of securities for Delaware-based company Cell>Point, LLC without proper licensure. Cell>Point works to develop molecular imaging and therapeutic agents for the diagnosis and treatment of a variety of illnesses including cancer and cardiovascular disease.
The Staff alleged, and the Administrative Law Judge agreed, that following an investigation Bearden, through DCM, had spent the years between 2013 and 2017 acting as an unlicensed broker-dealer when he solicited and assisted in sales of Cell>Point securities. Division staff found that Bearden had entered into a written agreement with Cell>Point to find investors. He then provided them with information, attended meetings between investors and a managing member, prepared paperwork, and even handled investor funds. In at least one instance, Bearden convinced an investor to transfer 401k funds to Cell>Point securities. Bearden was compensated for these services in what the staff deemed transaction based sales commissions at 10% of each sale.
“Proper licensure of financial professionals continues to be a priority for the Division. It ensures a high degree of consumer confidence in that only those who are deemed competent may practice and the public is alerted to those who may practice by the titles used,” stated Commissioner Rome. “We encourage investors to verify that offerings are also properly registered with us. These requirements are in place to protect investors. We pursue these types of actions in an attempt to encourage proper licensure by firms so that anyone who is providing investment advice or selling securities is authorized to do so.”
Division of Securities staff further determined that DCM’s filing paperwork, known as Form ADVs, were false due to failure to disclose federal tax liens in addition to neglecting to mention the investment adviser and broker-dealer activities of the company.
Despite the Respondents’ claims that the missing disclosures were a mistake, and that Bearden would limit future DCM activity to insurance sales, the judge was not convinced, stating that the violations of the Colorado Securities Act were willful, and took place over an extended period. Therefore, it was the judge’s decision, finalized by Commissioner Rome’s Order, that the licenses of DCM and Richard Bearden be revoked.