Louis Akers Jr., vice chairman and former chief executive of Ferris, Baker Watts Inc., has taken early retirement from the Baltimore brokerage, making him the highest-ranking executive to leave since federal investigators began probing the company's trades on behalf of a former customer accused of fraud.
A Ferris spokeswoman said Akers' retirement began Friday, ending a nearly 18-year career with one of the nation's largest remaining regional brokerage houses.
Nearly four months ago, Akers, 55, joined five other top executives and traders in taking temporary leave from the company. Akers is the third of those six executives to leave Ferris; three others have returned to work.
The Securities and Exchange Commission and the Justice Department are looking into an Ohio fund manager's use of Ferris' trading desk in an alleged stock manipulation scheme that went on for several years before his investors uncovered it on their own.
According to a criminal complaint, David A. Dadante used four illegal trading methods to artificially inflate shares in Duluth, Ga.-based Innotrac Corp. as part of a Ponzi scheme that cost more than 100 investors about $28 million.
The Sun reported in April that the fraud was occurring as Ferris' internal watchdogs began raising questions in early 2003 to top executives about Dadante's account.
Court records say the company allowed Dadante to continue trading through Ferris for much of the next year. Dadante's fund was turned over to a court-appointed receiver in late 2005.
In his role as vice chairman and as head of the company's private client group, Akers was among the executives who supervised the managers and employees charged with overseeing Dadante's account.
No one at Ferris has been accused of wrongdoing, but the company has undergone a series of management changes since hiring outside counsel to conduct its own investigation.
In addition to Akers, Ted Urban, the brokerage's executive vice president and general counsel, has opted for early retirement and Horace Usry, who was director of institutional sales, has resigned.
Ferris has declined to comment on the departures.
Ferris said in a recent financial disclosure that investigators are focusing on Dadante and his Ferris broker, previously identified as Stephen J. Glantz. Glantz, who left the company in December 2005, has told The Sun he did nothing wrong.
Ty Cobb, an attorney for Akers, said yesterday that he does not expect his client to be subject to any criminal or regulatory action stemming from the investigation.
Cobb said Akers agreed to retire after discussions with the company in which he decided to get out of the investment business for good.
"He was actively pursued by competitors and concluded that he didn't want to compete with [Ferris, Baker Watts], which he helped build from the ground up," Cobb said. "As a result, he agreed to terms with the company and wishes them all the best."
Roger Calvert, who took over as CEO when Akers stepped down from the post in 2001, announced Akers' retirement in a memo to employees, thanking him for his service and wishing him well in his future endeavors. Akers, who as CEO oversaw the company's expansion into the Midwest and other regions, could not be reached for comment yesterday.
Other Ferris employees who took leave during the investigation have returned. Patrick Vaughan, the director of retail sales, was invited to return to his post in March after spending weeks on paid leave. Traders John Belgrade and Mark LaVerghetta also returned in March.
Although Akers' status was the last unresolved personnel matter stemming from the company's internal probe, it could be months before federal investigators wrap up their investigation.
Ferris also could face lawsuits from investors in Dadante's IPOF Fund if the brokerage is found to have failed to adequately supervise the account to prevent fraud. Securities firms are required by law to police their customers, brokers and traders to ensure fairness in the market.