BizWorthy: Allegations Against Financial Adviser, CMS Faces Land Crunch, And More

Aug 29, 2019

New accusations have surfaced against a financial adviser well-known for his appearances on Charlotte TV stations. Jim Heafner closed his firm earlier this year amid allegations he gave shoddy advice and invested clients’ money with a Florida company under scrutiny from regulators.

Heafner firm, Heafner Financial, is a past underwriter of WFAE.

For more on the allegations and other business news, Tony Mecia of the Charlotte Ledger Business Newsletter joins WFAE's "Morning Edition" host Marshall Terry for this week's BizWorthy.

Marshall Terry: So, Tony, what are these latest accusations against Heafner?

Tony Mecia: Well, these are accusations that surfaced in sort of an unrelated lawsuit earlier this year and they just came out in the last month or so that say that Heafner when working with some of his clients really gave them some bum advice — for example, steered an elderly woman, 85 years old, into an annuity that locked up her assets for 10 years; that he failed to invest $200,000 of another client's money that just sat there in a cash account, you know, as the markets are going up — earned nothing; and also that he counseled one of his clients that he should withdraw some money but failed to tell that client that there would be some big fees associated with that.

So, these, Marshall, are all part of a bigger suit involving Heafner. Some of these different related allegations have come to light over the last few months as part of a different probe that the SEC is looking at related to some securities that he sold for at Florida company called First Global.

Terry: Now, at the beginning of that, you mentioned an unrelated lawsuit is how these new accusations against Heafner surfaced. What is this unrelated lawsuit, exactly?

Mecia: Sure. It's a little bit tricky, but essentially what happened is Hefner had been accused of selling these unregulated securities for this Florida company — that he was doing that over the last couple of years. And before that information came to light in the spring, Heafner was trying to sell his company, Heafner Financial, to a company called Baker Wealth Management, which is here in Charlotte.

And as he was selling that, some of these allegations were coming to light. He is suing because he wants that sale to continue. He says Baker agreed to buy his company, Heafner Financial, for $600,000 but hasn't paid him for that. So, he's seeking to have that transaction go through.

Terry: A big story this month has been CMS possibly choosing a site for a new high school. The district has promised to build in south Mecklenburg. You've done a lot of reporting on this and found one problem the district is facing is a lack of available land. How big of a problem is it?

Mecia: Well, it's really interesting to see. I was a little bit surprised looking at this. I mean, we all know that south Charlotte has been developing pretty rapidly, as have other areas of the city, but when you look at big parcels of land that might be available to build a high school, there are really only five.

I've talked to a bunch of land brokers, and they were telling me there are only five privately owned parcels in south Charlotte of about 20 acres or more where you could potentially build a high school — in all of south Charlotte. So, it really puts the squeeze on CMS. CMS has been looking at building a high school in south Charlotte by Olde Providence off Rea Road. They say no decisions have been made, but that's land that they own. And part of that, I think, is because there are so few parcels available in south Charlotte.

Now, there's some land that the county owns down there by schools by parks, by the Foxhole, which is Mecklenburg County's landfill, that might be potentially usable, but really the land is so scarce in south Charlotte it's really sort of forcing CMS to look at Olde Providence.

Terry: Wells Fargo has agreed to a $6.5 million settlement with the Navajo tribe. What's the story there?

Mecia: Well, this sort of falls under the heading of Wells Fargo problems of the last few years where they were accused of signing people up for accounts that they didn't need. Navajo Nation had contended that Wells Fargo had pursued some of its members, signing people up — people who didn't speak English very well — signing them up for accounts they didn't need, that sort of thing. So, Wells Fargo settled that for $6.5 million — really wants to sort of get some of these allegations behind them and move forward.

Terry: Finally, Tony, there's a feeling a recession might be just around the corner. You spoke with a few economists around the city to get their outlook on how Charlotte could be affected. What did they say?

Mecia: You have a few different things going on nationally. I think you're starting to see some concerns internationally about the effects of this trade war that the U.S. seems to be in with China. But the economists I talked with locally told me that, you know, Charlotte doesn't have as much exposure to that maybe as some other places and so some of the sectors that we have in Charlotte, some of the major economic sectors, you look at a banking, you look at commercial real estate.

But some of these might not really be as affected by larger national and international economic trends. That banking is still going strong, you know, you see restaurants popping up, apartments being built, and people that I talked to in Charlotte, you know, were not really seeing too much of a slowdown there.

The thinking is that if the nation were to go into a recession that Charlotte might be in a better position that a lot of other places.

Editor's Note: This post has been updated to reflect that Heafner Financial is a past underwriter of WFAE.