Court reinstates penalties in Las Vegas securities fraud case

Wednesday, May 16, 2001 | 10:35 a.m.

CARSON CITY -- The Nevada Supreme Court on Tuesday reinstated harsh penalties against a Las Vegas firm and its founder for violating securities laws in their $1 million stock offering.

The court said Clark County District Judge Mark Gibbons should not have modified the punishment given Robert Tretiak, founder and chief executive officer of Retirement Financial Centers of America.

Retirement Financial floated $1 million in a public offering to raise money to expand to a nationwide chain of franchises helping senior citizens perform financial planning. And it wanted to build a headquarters for the company on Lake Mead Boulevard.

In 1997 Secretary of State Dean Heller found the money raised was not spent in the way outlined by the prospectus. He said Tretiak charged $35,000 in personal expenses to a credit card issued to Retirement Financial. And he manipulated the offering to earn cash commissions on non-cash stock sales.

Heller barred Tretiak from association with a licensed broker-dealer or investment advisor in the state, but ruled he could apply to have his license reinstated after five years. Retirement Financial was ordered to cease and desist from further violations of the securities law.

And another firm involved, RFCA Financial, lost its broker dealer license. Heller found RFCA failed to "carry out its fiduciary duty to customers and stock purchasers." He said RFCA conducted trades at unfair prices; allowed employees to benefit at the expense of customers and it "breached its fiduciary duty to act in the best interests of customers."

Tretiak and the companies filed suit. Gibbons, in 1999, found the punishment was too harsh for Tretiak and RFCA. He ruled Tretiak could apply for a license in a supervised capacity after January 1999 and for an unlimited license in January 2002.

The judge also allowed RFCA Financial to reapply for a broker-dealer license after January 1999 on a supervised basis.

The Supreme Court said the sanctions by Heller "were not an abuse of discretion" and added "the district court erred in modifying the sanctions imposed against Tretiak and RFCA Financial."

It said there was substantial evidence to support the sanctions and they were not disproportionate to the violations committed.