Four Communications, One Principal Review

Item 1 - performance claim: defective as drafted. Three problems stack. The return is stated gross of fees, it covers an undisclosed and possibly cherry-picked period, and it does not say whether it is a composite or a single account. Performance must be net of fees, for a stated period, derived from all comparable accounts, and accompanied by the caveat that past performance does not guarantee future results. "Averaged" without methodology is the kind of misleading half-truth state antifraud provisions reach even absent intent.

Item 2 - testimonial: defective as drafted. The $200,000-to-$340,000 arc implies a 70% gain in 18 months, offered with no context, no disclosure that results are not typical, and no disclosure of whether the client was compensated. The kicker - "I trust him with everything" - edges toward a blanket endorsement the firm cannot support.

Item 3 - "can't lose money": prohibited outright. This is a guarantee against loss. Municipal bonds can default; state backing is often narrower than the speaker implies. There is no disclosure that cures a statement this categorical; the corrective step is retraction, not revision.

Item 4 - purchased list: high risk. The list is unvetted, the email is an advertisement, and the free dinner is itself a solicitation. Item 4 also raises do-not-call and anti-spam exposure and creates an unmanageable recordkeeping burden.

Both can survive if the substance is fixed before the formatting is.

Item 1:

• Convert to a net-of-fee figure for a clearly labeled period.
• State the methodology: number of accounts, whether asset-weighted, whether any accounts were excluded.
• Add the past-performance caveat and the advisory-fee disclosure.
• Strip the teaser framing ("message me to find out how") that withholds the basis of the claim.

Item 2:

• Keep the testimonial only if it is representative, or state plainly that it is not.
• Disclose whether the client was compensated, and whether the client is still a client.
• Put the result in context: time period, whether the account was funded or inherited, and that the outcome was not achieved for all clients.
• Drop "trust him with everything" and any implication of guaranteed results.

For both: obtain principal pre-approval before posting, and retain the approved version and the approval itself. A perfect disclaimer attached to an unapproved draft is still an unapproved communication.

Approval. The firm's written supervisory procedures require principal pre-approval for retail communications; Theo's four drafts are precisely the category covered. Publishing first and seeking forgiveness is itself a supervisory violation, independent of content. If the firm concludes that any of these items are advertisements distributed to more than one person, it must retain copies for the period the state and the firm's procedures require, along with the names of the approver and the dates.

The list recipients. Theo owes them accuracy and privacy, not just disclosure:

• The email must be truthful in every material respect, including the seminar offer - what will actually be served, whether a sales presentation will occur, and that attendance creates no obligation.
• If recipients did not opt in, the firm must honor do-not-call and opt-out machinery and check the list against internal and regulatory suppression lists.
• Because the blast does not discriminate by state, it may reach residents of states where the firm or Theo is not registered or notice-filed; the firm must be able to show that every recipient state is covered.
• A purchased list is a liability until scrubbed. The burden of proving the recipients were eligible sits with Theo and the firm, not with the list broker.