Canton businessman under scrutiny
Canton businessman James Maltz is under fire from Massachusetts Secretary of State William Galvin, who has charged him with acting as an investment advisor for senior citizens without holding the appropriate certifications and while pretending to operate as a non-profit organization.
Maltz owns and runs both Canton Financial, a for-profit company located on Neponset Street, and Consumer Educational Services, a non-profit affiliate.
"In particular, Maltz has committed and continues to commit sales practice abuses against elderly Massachusetts residents, most frequently by conducting seminars and providing purported financial counseling to potential sales targets under the guise of a non-profit organization offering free financial planning education to senior citizens," according to the deposition, filed by Galvin's office on Aug. 22. "In conjunction with these seminars and follow-up meetings with prospective clients, Maltz has frequently sold products to unsuspecting Massachusetts senior citizens, who were led to believe they were receiving an expert, objective, unbiased review and advice with respect to their financial assets."
Maltz's attorney, Thomas Butters, sees it differently.
"(Maltz's) first and foremost and only concern was to give seniors the best advice possible, which he did," Butters said. "The Secretary of State has zero evidence of any bad advice that Mr. Maltz has given to anybody."
Galvin is charging that Maltz is not a licensed investment advisor and has never even taken the required exam to be licensed.
Butters said Maltz had been a registered advisor for many years but since he was no longer selling equities and the like, he did not think he needed to be licensed. Butters said they are still trying to determine exactly what was required of Maltz with regard to licenses.
The deposition reads that Maltz uses the non-profit company to hold seminars at locations that do not allow for-profit companies to do so, such as senior centers. It explains he then invites interested seniors to attend a free one-hour consultation with Maltz at his office.
"However, at the free consultation, the senior is no longer dealing with (Consumer Educational Services), but is actually dealing with Canton Financial-Maltz's for-profit annuity and insurance-selling business-where Maltz provides the purported investment advice and pitches the products he sells," according to the deposition.
<p style="text-indent: 0in;">In testimony regarding Consumer Educational Services, Maltz addresses his reasons for opening the company.
<p style="text-indent: 0in;">"It is a non-profit organization that I established…that would enable me to give seminars as a non-profit organization for no fees that are educationally informational," he stated. "A lot of libraries or non-profits would not let Canton Financial in because it's a profit-making entity, so I established a non-profit, incorporated it, so I can go into these places, just to give information, give talks, speak with them."
<p style="text-indent: 0in;">In further testimony, Maltz states the free seminar he would give as Consumer Educational Services is the same one he would give as Canton Financial.
<p style="text-indent: 0in;">Maltz states any follow-up consultations resulting from a seminar would be with Canton Financial and not with Consumer Educational Services.
<p style="text-indent: 0in;">Maltz allegedly uses tools from the marketing organization, Piece of Pie, in his seminars. Piece of Pie is geared toward selling annuities and other products to the senior marketplace, according to the deposition, which also reads that Maltz is committed to selling $3 million worth of annuities and insurance annually in exchange for using Piece of Pie marketing strategies and tools.
<p style="text-indent: 0in;">"Maltz admitted that he gives Piece of Pie seminars and Piece of Pie annuity-selling content under the guise of the (Consumer Educational Services) non-profit," according to the deposition.
<p style="text-indent: 0in;">Galvin's office is requesting a cease and desist for Maltz's business, as well as an administrative fine. The deposition also requests the hearing officer to take any other action necessary and appropriate for protecting investors.
<p style="text-indent: 0in;">The complete administrative complaint is available on the Secretary of State's Web site, www.sec.state.ma.us.