‘The Money Guys’ Sue Maryland Attorney General

Aug. 05--A Towson financial services firm that was accused by Maryland's attorney general of misrepresenting the risks of its strategy fired back Tuesday with a lawsuit alleging that the attorney general is violating the owner's constitutional rights.

Philip Rousseaux, the owner of Everest Wealth Management and Everest Investment Advisors Inc., says he has been targeted by the securities division of the attorney general's office. He acknowledged making some errors years ago, but said they didn't endanger client funds, and have since been addressed.

"We embraced the mistakes, we fixed the mistakes, no client was harmed," Rousseaux told The Baltimore Sun. "We could tell there was an agenda with the securities division to try to hurt us and shut us down."

Maryland Attorney General Brian E. Frosh sought to close Rousseaux's business with an order to show cause in June. His office said it wanted to permanently bar Rousseaux from offering investment services in Maryland.

In the order to show cause, Frosh accused Rousseaux and his companies of fraud in connection with the offer, sale or purchase of securities; dishonest and unethical practices; and acting as an unregistered investment adviser.

The attorney general did not allege that client funds were misappropriated.

A spokesman for Frosh said the allegations in the June order "speak for themselves."

" Mr. Rousseaux is receiving due process through an administrative hearing, which he has requested," spokesman David Nitkin said.

Everest is well known in Baltimore for televised infomercials promoting Rousseaux and his team as "The Money Guys" and a show on 105.7 The FAN. Everest also sponsors Baltimore Orioles radio broadcasts on WJZ-FM; the team's announcers tell listeners they are broadcasting from the Everest Wealth Management booth.

Everest has also advertised in The Baltimore Sun.

Rousseaux aims his business at working-class investors, including police officers and firefighters, near or in retirement. He established Everest a decade ago and now has 2,000 clients and about $200 million in client assets for which his firm serves as the agent of record.

Everest Investment Advisors provides financial advice, and shares employees and clients with Everest Wealth Management.

The lawsuit, filed Tuesday in Montgomery County Circuit Court, asks that a judge bar the Maryland Securities Division of the attorney general's office from pursuing the order against Everest and declare the process unconstitutional. It names the securities division and its commissioner as defendants

Everest Wealth Management says in the lawsuit that it sells fixed indexed annuities, an insurance product that is not a security, or a tradable financial asset. A third-party insurance company provides the annuity and backs it with federally required financial reserves.

Because the fixed indexed annuities are not securities, the firm argues, they are outside the jurisdiction of the securities division. It says the investigation violates the right to due process under the state and U.S. constitutions.

The firm says the attorney general's investigation began in 2012 and identified problems, including a software billing error and the mislabeling of a fee, that have since been fixed. Together, the firm says, they involved less than $8,400.

Rousseaux no clients were harmed. He said Everest has hired a new compliance firm, and thought the matter was settled.

Everest is also contesting the order to show cause in an administrative proceeding.

Rousseaux said fewer than five clients have left the firm since the attorney general's action. But he said the office was bombarded for days afterward with calls from confused clients.

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