Trust funds $ planner faces scrutiny after SEC fine

MILTON - The Milton Trustees of the Trust Fund and Board of Selectmen will hold a special joint meeting Tuesday following revelations that the securities firm overseeing the town's trust funds investments was recently fined $100,000 for using misleading advertisements to woo prospective clients.

MacKensen & Company, and the firm's former owner, Warren J Mackensen, were censured in an SEC ruling on Sept. 3, which also levied a $100,000 fine on the company.

The censure was based on an SEC finding that MacKensen & Company sent form letters from 2010-2012 to potential municipal clients like Milton that claimed actual growth figures while they were, in reality, only hypothetical, back-testing investment models.

A second censure noted that the company failed to develop policy to prevent such deceptive promotions among its company.

The SEC said those letters resulted in an additional 20 municipal clients for the firm.

Mackensen, of Hampton, N.H., later sold the company to new owner David Mayes, who is expected to be at Tuesday's meeting, which is set for 4 p.m. at Town Offices.

Trustees chairperson Karen Brown said today there would be a public comment period at the start of the meeting, but that a nonpublic session might be called.

She said it might go nonpublic because, for one reason, she wanted "the trustees to speak freely and not worry about slandering the company."

Brown said trustees had voted to go with MacKensen & Company in July 2014 after meeting MacKensen at a conference and after talking to several people who had moved their assets.

She said she and the trustees are very happy with the performance of MacKensen & Company and said she felt their problems with the SEC were "just for advertising."
She said the town pays nothing if the firm's financial planning doesn't make money, and if they do they're only charged less than a half percent, she estimated.

She said she called the meeting just so Mayes could give his side of the story with regard to the SEC censure.

"I felt it was necessary to touch base with the president (Mayes)," she said.

Meanwhile, the New Hampshire Attorney General's Office is doing its own investigation into whether the adverse ruling could have a detrimental effect on the New Hampshire towns MacKenson & Company represents.

Brown estimated some 29 towns had taken on the investments firm as a result of the advertising campaign that caused its censure.

"We'll make our decision whether to stay with them based on what we hear Tuesday and what the AG's findings are," Brown added.

The current balance of the trust fund is a little over $1 million, Brown said.