1300 W. Washington Street
Phoenix, AZ 85007-2996
The Corporation Commission ordered respondents Nathaniel S. Barnhart of Green Valley and Cornerstone Wealth Management, LLC to pay a $10,000 administrative penalty for committing investment advisory fraud. The Corporation Commission also suspended Mr. Barnhart's investment adviser representative license for five months.
The Corporation Commission found Mr. Barnhart was recruited by William Andrew (Andy) Smith and Christopher (Chris) Cox to form Cornerstone Wealth Management, LLC (Cornerstone) in order to take over servicing the investment advisory clients of their firm, Smith & Cox, LLC. During this time, Andy Smith, Chris Cox and Smith & Cox, LLC were respondents in a pending 2018 Commission enforcement action alleging securities fraud and investment advisory fraud.
The Corporation Commission found Mr. Barnhart and Cornerstone told clients misleading statements about Smith & Cox, LLC “rebranding” to Cornerstone Wealth Management, LLC while failing to disclose the Commission’s 2018 enforcement action against Smith & Cox, LLC and other negative facts.
In settling this matter, Mr. Barnhart and Cornerstone admit to the Commission’s findings, including that they committed investment advisory fraud, for purposes of this proceeding and agree to the entry of the consent order.
This consent order does not require Mr. Barnhart or Cornerstone to pay restitution because Barnhart’s former advisory firm, AE Wealth Management, LLC, has paid all restitution owed to the investors as required by Commission’s Decision #78219 dated September 1, 2021.
All documents relating to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number S-21104A-20-0103.