- Associated Press - Thursday, May 22, 2014

RALEIGH, N.C. (AP) - After client complaints about money lost in volatile, unwanted investments, North Carolina securities regulators said Thursday that they revoked registrations for a state senator, his partner and their firm to act as advisers.

The secretary of state’s office said it revoked the state registrations of Sen. Thom Goolsby, R-New Hanover; James Upham; and their Wilmington firm Empowered Investor. The two Wilmington men and their firm were also ordered to stop engaging in any financial service business in North Carolina.

Goolsby and Upham consented to the order, which bars them from registering as investment advisers for 10 years.

Goolsby, a lawyer who is not seeking re-election this year, declined to comment and referred questions to his attorney.

“This is a business that was ultimately not a success. Thom Goolsby dedicated a great deal of energy and his own money in this venture. He never received even one paycheck. However, he worked hard to see to it that all the debts of the corporation were paid and investors compensated,” attorney Melissa Gott said in an emailed statement.

Upham could not be reached. Phone numbers listed to him and the firm were disconnected. Upham resigned from Empowered Investor several months ago when the firm closed, Gott said.

Upham was appointed by state Senate leaders to a board overseeing state business incentives until his two-year term expired last November, state Commerce Department spokeswoman Kim Genardo said.

Last year, 10 investors sued Goolsby and Upham for selling them conservative investments and instead putting their money into riskier vehicles that lost tens of thousands of dollars. A lawyer for those investors, Mitch Baker of Wilmington, said the complaint was settled in arbitration last fall.

State securities investigators said they found that Goolsby and Upham used a weekly radio show in the Wilmington area to market their investment strategy. The plan was described as investing no more than 50 percent in securities at any one time, selling any investments that lost more than 10 percent to prevent further loss, and selling investments that rose more than 20 percent to capture the gains.

Goolsby and Upham failed to tell clients or their radio listeners that “Upham was generating losses in the investment funds entrusted to him to manage by engaging in an investment strategy that was markedly different from and that conflicted with the strategy discussed on their radio show,” state regulators wrote in the consent order.


Emery Dalesio can be reached at https://twitter.com/emerydalesio.

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