Jerry Tagge, Omaha financial adviser and legendary former Nebraska quarterback, has been fined and suspended by the industry’s watchdog for running afoul of rules governing the borrowing of money from clients. He has repaid the money in full, the watchdog says.
The Financial Industry Regulatory Authority, or Finra, fined Tagge $2,500 and suspended him from working in the industry for two months. He has been suspended since July 19, according to Finra, which released the case’s investigatory documents in its August reports.
Tagge is the executive vice president of Tagge Rutherford Financial Group, which has about $800 million in assets under management. He led the University of Nebraska to consecutive college football national championships in 1970 and 1971.
Tagge, according to a Finra disciplinary report, borrowed $125,000 from a customer in 2009 who was also a “close friend.” Finra did not name the friend-lender.
The loan, Finra said, was made to Tagge “with the understanding that most of the proceeds would be used to satisfy his tax debts.”
John Shaw, a Kansas City attorney who represented Tagge, issued a statement to The World-Herald on his behalf:
“We value the strong relationships we have developed with our clients over the years, and we work hard every day to validate their trust in us,” the statement said. “We are proud to be part of Tagge Rutherford, a vibrant company which continues to grow. We are pleased to reach a settlement which places this matter behind us permanently.”
The rules of Finra, an industry self-policing organization authorized by the Securities and Exchange Commission, bar wealth advisers from borrowing from customers absent approval from their firm, and then, only under formal policies.
In Tagge’s case, Finra wrote in the disciplinary report, his “firm prohibited its representatives from borrowing from customers, which Tagge knew.”
Tagge, Finra said, consented to the fine and suspension without admitting or denying the findings. A “Letter of Acceptance, Waiver, and Consent” on Finra’s website that details the findings says Tagge attempted to conceal the loan by arranging for his stepson and wife to sign the promissory notes.
“Tagge’s stepson and wife received the proceeds of the loans, then conveyed approximately 75 percent of those funds to Tagge or for his benefit,” says the Finra document, which is signed by Tagge.
Also fined and suspended by Finra in the matter was Nathaniel Edie, who according to the watchdog, “substantially assisted and contributed to his stepfather’s misconduct of borrowing money from a customer of their member firm by, among other things, preparing and signing a note reflecting a loan and conveying its proceeds to his stepfather.”
Edie was fined $1,250 and suspended for 10 days. Shaw, the attorney, also represented Edie, who he said was part of Tagge Rutherford. Shaw said the statement he issued also applied to Edie.
The loan, according to Finra documents, was repaid in 2012 after the customer-lender demanded repayment. It was only last year, Finra says, that the customer complained about the borrower/lender relationship and an investigation commenced.
Tagge Rutherford, according to its website, offers its securities and investment advisory services through a Colorado broker/dealer called Cetera Advisors; Cetera Advisors, according to the Finra documents, was the company that acted on the customer’s complaint about the loan.
Cetera, Finra says, investigated the matter after learning of it in 2015 and fined Tagge $5,000 and suspended him for 30 days. Cetera suspended Edie for two weeks and fined him $2,500, Finra said. The Cetera fines and suspensions are separate from the ones Finra handed down.
Tagge, according to Finra, has been registered with the group as an investment adviser since 1998. The group says he “does not have any history of discipline by Finra, any other self-regulatory organization, the Securities and Exchange Commission, or any state securities regulator.”
An Omaha native who grew up in Green Bay, Wisconsin, Tagge was a first-round pick in the NFL draft and played professional football from 1972 through 1979, eventually ending up in the Canadian Football League.