Area financial adviser barred from industry, ordered to shut down business

An Indianapolis-area financial adviser has been barred from working in the securities industry and must shut down her company, Steele Financial Inc., the U.S. Securities and Exchange Commission announced Friday.

The actions stem from a September 2018 complaint that the SEC filed against Tamara “Tammie” Steele, alleging that Steele violated federal law by selling $13 million in high-risk securities to more than 120 clients between 2012 and 2016 without disclosing that the firm stood to receive commissions of up to 18% from those sales.

The complaint also alleged that Steele and her firm created false invoices and took other steps to conceal their involvement in the selling of these securities.

The securities were investments in Houston-based Behavioral Recognition Systems Inc., a privately company that the SEC charged with fraud in December 2017. That company filed for Chapter 11 bankruptcy protection in May 2019.

As part of the judgement against Steele and Steele Financial, Steele must pay a $75,000 civil penalty. She must also disgorge $845,760, an action which the SEC said will be satisfied by Steele’s return of 1.4 million shares of Behavioral Recognition System’s stock to that company’s bankruptcy trustee.

Steele is still facing other issues.

In June 2019, financial adviser Casey Kemerly of Pendleton filed suit against Steele in Madison County circuit court. In his complaint, Kemerly said Steele sold her clients’ accounts to him, but later defamed Kemerly and persuaded some of those clients to switch their accounts to another firm. That case is pending.

And, since 2017, 13 clients have filed complaints against Steele with the Financial Industry Regulatory Authority, alleging that Steele recommended investments that were not suitable for them.

Of those complaints, six were settled, with customers receiving between $18,700 and $1.2 million each. One case went to arbitration, where Steele was ordered to pay more than $220,00 in damages and attorney fees. The other six cases are pending.

As a result of the multiple customer complaints lodged against Steele through FINRA, the Indiana Department of Insurance last year declined to renew Steele’s state insurance producer license.

A written statement, sent to IBJ after Steele consulted with her attorneys, placed the blame for Steele’s problems on Ray Davis, the founder and former owner of Behavior Recognition Systems Inc., who was charged with fraud and embezzlement in late 2017, about seven months before he died. The statement said Steele “fell victim to a financial sociopath” and was “swindled of over $4 million.”

“Ms. Steele lost millions of her own hard-earned dollars because she trusted someone who clothed himself in financial respectability,” the statement said. “Tammie did her due diligence to verify what he told her and many others.”

The statement said Steele has, “to the best of her ability, reimbursed clients who invested directly in BRS, and at no time did Tammie receive any financial compensation for introducing her clients to that entity … There is no dispute or contraction in this statement: Tammie lost more money than any other investor in the company.”