Shareholder Spotlight : Shadows in the Portfolio – NewEdge Advisors and the Cracks in Financial Trust

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In the cut-throat world of wealth management, where promises of security and savvy advice are slung like cheap suits, NewEdge Advisors LLC struts around like it’s got the golden touch. Based out of New Orleans, this registered investment adviser – with tentacles reaching into billions in assets under management – pitches itself as the advisor’s advisor, a firm built for independence and success. But catch a glimpse behind the mask, and what you find is a mess of breaches, lawsuits, and regulatory slaps that make you wonder if anyone’s actually watching the till. It’s the kind of operation that leaves you raging at the sheer bloody arrogance of it all – handing over your life’s savings to suits who can’t even keep your data from the hackers, let alone steer your nest egg without screwing it up.

NewEdge wasn’t always this sprawling beast. It gobbled up outfits like Mid Atlantic Financial Management back in 2021, inheriting not just clients but a baggage claim full of skeletons. And in 2024 alone, the scandals piled up faster than unpaid bills. We’re talking data leaks that exposed over a thousand clients’ deepest secrets, a widow suing over botched estate advice that cost her a fortune in taxes, inherited SEC fines for shady fee grabs, and advisors getting slapped with sanctions for side hustles that scream conflict of interest. It’s enough to make you spit – these pricks are supposed to be the guardians of your wealth, not the bloody vandals.

The Data Debacle: Hackers in the Henhouse

Picture this: you’re trusting a firm with your Social Security number, your bank details, the lot – the keys to your financial kingdom. Then, some opportunistic bastards hack into an advisor’s email, and suddenly your info’s floating around like chum in shark-infested waters. That’s exactly what went down at NewEdge in late 2023 and early 2024. Suspicious activity popped up on February 15, 2024, but it took until July 18 for a full review to confirm the damage. Over 1,116 clients had their names, SSNs, driver’s licenses, and account numbers potentially swiped between October 21, 2023, and March 6, 2024.The firm finally fessed up with letters mailed on September 12, 2024, offering two years of free credit monitoring from Experian – as if that’s supposed to make up for the gut-wrenching paranoia of identity theft. Clients were told to watch their accounts like hawks, slap on fraud alerts, the whole nine yards. But let’s call it what it is: a monumental fuck-up in basic cybersecurity. Law firms like Strauss Borrelli PLLC jumped in, probing for negligence, because why wouldn’t they? In an industry obsessed with risk management, NewEdge couldn’t even lock the bloody door. It’s infuriating – these are the people paid fat fees to protect you, and they let hackers waltz in. No charges yet, but the stench of incompetence lingers, making you question every advisor’s email password policy.

Fiduciary Fumble: The Widow’s Reckoning

Nothing boils the blood like a firm failing the most vulnerable. Enter Linda Rever, widow of Howard Belzberg, who in November 2024 dragged NewEdge Advisors, Charles Schwab & Co., and their Pasadena affiliate Generate Wealth into California Superior Court. The suit screams negligence and breach of fiduciary duty: Belzberg, a client, wasn’t properly advised on naming Rever as beneficiary on his IRA. Result? She got hammered with taxes she shouldn’t have, losing out on massive savings upon his death.

Filed on November 15, 2024, in Los Angeles County, this case rips open the underbelly of so-called “expert” advice. Fiduciaries are meant to act in your best interest – full stop. But here, the defendants allegedly skimped on estate planning guidance, leaving a grieving woman to foot the bill. It’s the epitome of the industry’s hypocrisy: preaching prudence while dropping the ball on basics like beneficiary designations. The lawsuit’s ongoing, no settlement in sight, but it exposes how NewEdge’s ecosystem – affiliates and all – can leave clients high and dry. You can’t help but feel a surge of outrage; these firms rake in commissions, yet when it matters most, they’re as useful as a chocolate teapot.

Inherited Sins: The SEC’s Share Class Sting

NewEdge didn’t start from scratch; it merged with Mid Atlantic Financial Management (MAFM) in 2021, swallowing a nasty pill from the SEC’s 2019 enforcement action. Back then, MAFM got nailed for recommending pricier mutual fund share classes loaded with 12b-1 fees – those sneaky ongoing distribution charges – when cheaper options existed. From 2014 to 2018, they pocketed these fees without fully disclosing the conflicts, breaching their duty to seek best execution for clients.

Unlike firms that self-reported under the SEC’s Share Class Selection Disclosure Initiative and got leniency, MAFM dragged its feet. The bill? $1,027,002 in disgorgement and interest, plus a $300,000 civil penalty – part of a $10 million haul from 17 firms. No admission of guilt, but the findings paint a picture of greed over transparency. NewEdge inherited this taint, a reminder that mergers don’t erase history. It’s galling – advisors steering you into costlier funds for their cut, all while smiling about “your best interests.” In a world where fees eat returns alive, this kind of bollocks erodes trust faster than acid.

Rogue Advisors: Sanctions and Side Gigs

The rot doesn’t stop at the firm level; it festers in the ranks. Take Christopher Lee Baugh, NewEdge’s Miramar, Florida, advisor under the Wealth Stewards banner. In August 2024, the Arkansas Securities Department sanctioned him for unauthorised outside business activities. While at Raymond James, Baugh raked in over $10,000 from clients for flogging “Rabbi Trust” deferred compensation plans without approval – a clear violation of securities laws and FINRA rules.

This led to his 2024 termination from Raymond James for “conduct inconsistent with firm policies.” NewEdge scooped him up in March 2024, but slapped on a heightened supervision plan until 2027: extra audits, pre-approvals, the works. No direct client gripes tied to this, but Baugh’s CRD history shows prior red flags from A.G. Edwards and Raymond James. It’s the classic advisor roulette – jumping firms after scandals, dragging baggage along.

Then there’s Richard Allen Ceffalio Jr., Arlington Heights’ GWM Advisors rep since 2019. A May 28, 2024, customer complaint hit FINRA arbitration (docket #24-01188), alleging unsuitable recommendations that tanked accounts with “miscellaneous” products. Damages? Unspecified, but amended from zero – smells like a big one. Ceffalio’s clean at NewEdge otherwise, but this pending case underscores the risks: advisors peddling dud advice, leaving clients in the lurch.

These aren’t isolated arseholes; they’re symptoms of a firm that hires ’em anyway. Regulators are watching, but clients pay the price.

The Cummins Connection: Ethical Echoes in the Holdings

Now, let’s talk stakes – literally. NewEdge Advisors isn’t just playing with client cash; it’s got skin in the game with big names like Cummins Inc. Recent 13F filings show they boosted their Cummins position by 47.8% in Q1 2025, snapping up 14,528 more shares. Total holdings? Valued at a cool $14,074,000 as of the latest report. That’s no trivial punt; it’s a hefty bet on the diesel engine giant, part of a portfolio juggling thousands of positions.

But Cummins? Oh, that’s a rabbit hole of its own that we’re still exploring. NewEdge’s track record – breaches, breaches of duty, undisclosed fees – mirrors Cummins’ regulatory dodges. Both preach responsibility while stumbling into fines and suits. It’s not a stretch to question if NewEdge’s investment choices reflect a tolerance for “alternative” ethics: firms that prioritise profits over propriety. After all, why hitch your wagon to a company fresh off the biggest environmental penalty in history unless you see a kindred spirit? Clients deserve better than portfolios laced with such toxic ties – it’s a slap in the face to anyone banking on integrity.

In the end, NewEdge Advisors embodies the financial sector’s dirtiest secret: trust is a commodity, easily traded until it snaps. With billions in AUM and a string of 2024 scandals, they’re not the safe harbour they claim. If you’re invested here, check your statements twice – and maybe look for the exit. The outrage isn’t just personal; it’s systemic, a raw reminder that in this game, the house often rigs the odds.

Lee Thompson – Founder, The Cummins Accountability Project

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