A financial advisor with ties to Rumson is facing accusations of wrongdoing.
Rumson resident John “Jack” C. Howley, 58, was discharged from the New York-based Park Avenue Securities Oct. 30, 2018 after failing to disclose private securities transactions and referring clients to investments not offered by the firm.
Since the firm severed its ties with Howley, six customer complaints have been levied against him that are still pending decisions. The complaints stem from Howley’s alleged dealings with Global Credit Recovery (GCR), an investment offering the U.S. Securities and Exchange Commission (SEC) labeled a Ponzi scheme in September 2018.
In May, GCR’s Kevin B. Merrill, 53, pleaded guilty to conspiracy and wire fraud. GCR operated from 2013 through September 2018. Co-defendants Cameron R. Jezierski, 28, and Jay B. Ledford, 55, pleaded guilty in September for their involvement in the scheme.
Though Howley was never charged by the SEC, the damages requested from complaints filed against him total more than $4.9 million.
Though five customer disputes are being arbitrated out of court by the Financial Industry Regulatory Authority, known as FINRA, a Two River-area couple filed a civil complaint in Monmouth County Superior Court in March.
The lawsuit seeks a total of $1 million in damages from Park Avenue Securities and Howley Financial Group, a financial services firm headed by Howley for 25 years. Its official website is not currently functional.
Howley chose not to comment for this story. But Mary P. Hansen, a partner with the Philadelphia law firm Drinker Biddle, is representing Howley during this legal process and said the allegations contained in the lawsuit “are without merit.”
“(Howley) and his immediate family are among more than 230 investors who were victims of a sophisticated Ponzi scheme perpetrated to defraud investors nationwide of nearly $400 million,” Hansen said in a prepared statement to The Two River Times.
“Like other investors and sophisticated institutions, Mr. Howley placed his trust in Kevin Merrill, who in May admitted under taking the fraudulent Global Credit Recovery scheme, pled guilty to multiple federal criminal charges and is facing a lengthy prison sentence. At no time did Mr. Howley have knowledge of Kevin Merrill’s criminal enterprise or intent to defraud,” Hansen added.
Hansen noted that Howley is hopeful the court-appointed arbitrator will soon begin distributing Merrill and GCR’s asset proceeds to investors who were harmed.
According to the civil complaint, which was submitted on behalf of the Two River-area couple by Rumson attorney William A. Despo, his clients first met with Howley in early 2017 for professional assistance with their investments, life insurance and retirement planning.
The lawsuit alleges that over the next 15 months Howley recommended the purchase a $6 million life insurance policy from Guardian, a life insurance agency with which Howley has been an advisor since 1983. Howley also suggested an investment in Global Credit Recovery.
The complaint continues that “Howley used the GCR investment as a selling point for the Guardian Life Insurance policy that earned (Howley) a large stream of commissions.”
Despo’s complaint said that by December 2017 his clients invested a total of $1 million with GCR, an investment that “would be sufficient to pay the premium for the Guardian Insurance.”
“We think we’ve been harmed, and I think we’ll be successful in what we’re seeking,” Despo said when reached by The Two River Times Aug. 5.
A Sept. 9, 2018 lawsuit against GCR and Merrill was filed by the U.S. Securities and Exchange Commission in the United States District Court in Maryland. The District Court indicted Merrill and two others Sept. 11, 2018 for conspiracy, identity theft, money laundering and wire fraud. Merrill and GCR’s assets were frozen two days later.
Prior to the pending customer disputes against Howley, which date back to November 2018, the Rumson resident was an active part of the borough community and was celebrated professionally in May 2018 when he was inducted into the Guardian Life Insurance Hall of Fame.
Guardian could not be reached for comment.
In 2016, Howley was named the Grand Marshal of the Rumson St. Patrick’s Day Parade, an event he helped found and for which he was a board of trustees member.
According to former Rumson Mayor John Ekdahl, Howley is a “pay-it-forward, giving-back type of guy,” who served on the borough’s recreation committee. Howley also coached recreation and travel basketball and softball and was active in the local track and cross country community.
“My relationship with (Howley) is restricted to running and charitable work,” local restaurateur, philanthropist and Rumson-Fair Haven High School running coach Tim McLoone said in an Aug. 12 inter view. “(Howley) has always been good to our athletes and a supporter of our charitable efforts. There was never any inkling of anything like (these allegations). He’s always been a very, very positive influence on our community.”
Howley also organized the first Rumson Opening Day baseball/softball parade, a tradition that continues today.
Howley’s home on Rumson Road is currently for sale, listed at $4.5 million.
