Securities Lawyers Blog

According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Ronald Hannes (Hannes), previously associated with Woodbury Financial Services, Inc., has at least one disclosable event. These events include one tax lien, alleging that Hannes recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.

FINRA BrokerCheck shows a final customer complaint on September 09, 2024.

The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Ronald Walter Hannes (Respondent). In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement, which the Commission has determined to accept. The commission finds that on September 16, 2020, the State of Washington Department of Financial Institutions Securities Division entered a Consent Order (‘Washington Order’) in an administrative action entitled In the Matter of Determining Whether there has been a violation of the Securities Act of Washington by: Ronald Walter Hannes; Hannes Financial Services, Inc., Order No. S-20-2873-20-CO01. The Washington Order incorporated by reference the Findings of Fact and Conclusions of Law in the Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Deny Future Registrations, Impose Fines, and Charge Costs, Order Number S-20-2873-20-SC01 (‘Statement of Charges’). The Statement of Charges found that, among other things, Hannes violated RCW 21.20.010, the anti-fraud section of the Securities Act of Washington, and engaged in dishonest and unethical business practices in violation of WAC 460-22B-090. Without admitting or denying the Findings of Fact and Conclusions of Law in the Statement of Charges, Hannes consented to the entry of the Washington Order, which ordered, inter alia, Hannes to cease and desist from violating RCW 21.20.010, and further ordered that any application for registration as an investment adviser, investment adviser representative, broker-dealer, or securities salesperson by Hannes shall be denied. The Statement of Charges incorporated by reference into the Washington Order found that ‘[f]rom approximately 2003 to 2019, Hannes engaged in an extensive, long-term fraud against his  . . . Clients by convincing them to write checks to [Hannes Financial Services, Inc.] for off-the-books investments, then using the money for unknown purposes.’ The Statement of Charges also found that Hannes ‘defrauded at least nineteen clients, with total losses exceeding $2.9 million’ and appears to have falsified checks during an internal investigation conducted by the dually-registered broker-dealer and investment adviser with which Hannes was associated at the time. On July 18, 2023, Hannes pled guilty to one count of ‘Investment Advisor Fraud’ in violation of Title 15 United States Code, Sections 80b-6, 80b-17 before the United States District Court for the Eastern District of Washington, in United States v. Ronald Walter Hannes, Case No. 2:22-CR-0085-TOR. On February 22, 2024, a judgment in the criminal case was entered against Hannes. He was sentenced to probation for a term of five years and ordered to pay $3,187,545.15 in restitution and a $100 assessment. In his signed Plea Agreement, Hannes stipulated and agreed that the facts set forth in the ‘Factual Basis and Statement of Facts’ are accurate. These facts include, inter alia, that Hannes persuaded victims ‘to invest in separate ‘high rate, tax-free’ bond investments,’ and convinced victims to write checks to Hannes Financial Services, Inc., and other entities at Hannes’s request, to invest in the bonds, but ‘there were no bonds or securities attached to these investments.’