August 21, 2012
--- Ron Rhoades, the chair-elect for the National Association of
Personal Financial Advisors (NAPFA) for 2012-13, announced he would resign. ---
In a statement released late Monday, NAPFA said Rhoades decided to step down
after disclosing that he had committed a compliance violation by failing to
file registration papers with the State of Florida Division of Securities. “Ron
informed NAPFA of this violation, and the National Board has decided to move on
in 2012-13 without Ron as the chair,” NAPFA said. “To fill the vacated chair
position on NAPFA’s National Board, the Board will hold a special election next
month. Until that time, Susan John has agreed to continue on as Chair until the
special election is held.”
The organization released its statement after Rhoades earlier on Monday made
public the reason for his resignation. Rhoades said that over the previous
several weeks, he found out that he and his firm had committed a compliance
violation by failing to file registration papers on time with the State of
Florida Division of Securities.
Rhoades, president and chief compliance officer of ScholarFi Inc., said the
company was formed in September 2011 as a state-registered firm in New
York. The firm accepted a total of 11 clients from Florida, which exceeds
the de minimis threshold of five clients for registration in Florida. “I
had considered in the late summer of 2011 whether to register in Florida, but
mistakenly believed that I could wait until the first quarter of 2012 to register
with the state,” Rhoades said.
Rhoades said that registration documents were submitted to the state in
February 2012, but in late May 2012 he was made aware of the mistake. He ended
his statement by saying, “Since then I have undertaken candid disclosures of
all requested facts to the state, and I await their final determination of this
matter.
“While my mistake was unintentional, the violation of compliance regulations
is nevertheless material in nature,” Rhoades said. “The mistake made was mine,
and mine alone. I accept full responsibility for my personal mistake, and all
consequences that may flow therefrom, including the decision by NAPFA to move
on without me serving as chair in the coming year.”
Jill Cornfield