Accused securities firm being sold

A Northern California financial services company under investigation for its role in the scandal that toppled Santa Rosa investment firm AGA Financial is being sold.

EPlanning Securities, a Roseville-based network of independent securities brokers, is being acquired by Omaha, Neb.-based Securities America Advisers Inc.

Securities America expects to wrap up the transaction by the end of the year, pending approval by regulators, said Gregg Johnson, senior vice president of branch office development at the firm.

AGA Financial was licensed by ePlanning, enabling it to trade stocks and other securities for its clients. EPlanning is under investigation by the state Department of Justice and U.S. Securities and Exchange Commission for its role in what is shaping up to be one of the largest financial fraud cases in recent state history.

More than 700 investors have told DOJ investigators that they were defrauded in the scandal.

Two prominent figures in the investigation, Gary Armitage and Jeff Guidi, were ePlanning advisers in Santa Rosa operating under the name AGA Financial.

Armitage was on the board of ePlanning for years before losing his license in May and stepping down from the company. A short time later, the Department of Justice raided the offices of a close business associate of Armitage, James Koenig, head of the Redding firm Asset Real Estate and Investment.

Armitage and Guidi invested millions of dollars from Bay Area clients -- many of them senior citizens -- in real estate deals put together by Koenig. After payments on their investments ceased in 2007, investors learned that Koenig was a convicted felon with a history of defrauding investors.

Subsequent lawsuits have accused all three of running an elaborate Ponzi scheme in which new investors' assets were used to enrich themselves and make payments to prior investors.

Armitage closed AGA in September, assuring investors that his son Jeremy would begin managing their accounts.

Jeremy Armitage opened his own ePlanning office, under the name Ethos Capital Management, on Stony Point Road in October, but a short time later laid off the office staff. He has not responded to e-mail and voicemail messages for weeks, and the office remained closed Tuesday.

Guidi, who opened his own ePlanning office on Orchard Street in downtown Santa Rosa, declined to comment.

Johnson said Securities America performs due diligence before completing any acquisition. He declined to comment about the investigations or allegations dogging the firm. He said the ePlanning office in Roseville would be run as a branch office of Securities America.

Oakland financial adviser Steven Wilkinson, a representative of ePlanning, said Securities America is trying to recruit him and others to join the firm, but he hasn't made up his mind yet.

"They are a good-sized firm with a good reputation," Wilkinson said, noting that Securities America has more than 2,000 financial advisers.

EPlanning has suffered during the economic downturn, as investors have less money to put at risk and the firm had fewer financing options since the credit crunch hit, he said. The company, which had about 150 brokers around the state at its peak, has laid off about 70 percent of its employees, Wilkinson said.

But the AGA scandal and subsequent investigations are likely what put the company over the edge, forcing it to join a larger firm to survive, Wilkinson said.

"Gary Armitage and all that stuff, I imagine, was like the icing on the cake," he said.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com.