Updating Turbeville-Related Troubles

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Remember John Turbeville, the controversial Little Rock financial adviser who drew action from state securities regulators for alleged misdealings with pension fund clients?

We understand the city of Helena has received $150,000 to settle its dispute with Turbeville during his tenure with Merrill Lynch.

A variable annuity sold to the Helena Police Pension Fund by Turbeville created liquidity problems, a situation that was discussed publicly by the Arkansas Fire & Police Pension Review Board in 2009.

This resulted in a consent order with Merrill Lynch for failing to prevent securities violations outlined as: “State of Arkansas alleges that Mr. Turbeville made unsuitable investment recommendations and material misrepresentations and omissions regarding the sale of variable annuities.”

Other alleged violations investigated were “dishonest and unethical practices,” “failure to disclose fee structure” and “misrepresentation in client letters.”

You might recall that once upon a time Turbeville trotted out Helena among his testimonial letters.

That was curious in 2009 and turned dubious by 2010.

It was public knowledge that city officials in Helena had filed a complaint against Turbeville with the Arkansas Securities Department and the Helena police and fire pensions no longer did business with him.

Back in 2010, it also was public knowledge that Helena and its fire and police pension boards had hired outside counsel to help recover funds lost in dealings with Turbeville.

The ASD alleges that Turbeville persuaded Helena pension officials to liquidate more than half of the fund’s value by selling shares in various mutual funds at a loss of more than $37,000 in order to buy a variable annuity with a nine-year “lock-up” feature, making it difficult for the fund to pay its monthly obligations.

That liquidity problem was compounded, according to the ASD, when Turbeville promised to file the fund’s 2007 annual report with the state Pension Review Board and then failed to do so, costing the fund at least $160,000 in state turn-back funds.

Oh, yes.

You might recall that Turbeville sued the Jacksonville Policemen’s Pension & Relief Fund last year after the board dumped him as its financial adviser.

That suit was dismissed back in August after the case languished in Pulaski Circuit Court with no action for more than a year.

Northwest News

In Northwest Arkansas, Turbeville had handled Springdale’s police pension fund while at Merrill Lynch. But when he left the firm in January 2010, the city kept the fund there under another financial adviser, city clerk Denise Pearce said. She added they’ve had no problems with that fund.

But Turbeville got a ringing endorsement from Russellville’s city clerk, Kathy Collins. He remains the adviser for both that city’s fire and police pension funds, and is doing a fine job, Collins said.