It’s one of the most significant decisions a person can make: Who can I trust to monitor my investments?

A five-letter acronym known as FINRA can be a good place to start. Known as the Financial Industry Regulatory Authority, FINRA offers a tool called BrokerCheck that offers free background checks of investment professionals.

In the case of Lee Wimmer, the disgraced head of now-bankrupt Cornerstone Enterprises of Greenwood, a run of his name through the database reveals that on June 18, 2007, Wimmer misappropriated $299,500 of a customer’s funds, leading the federal Securities and Exchange Commission to bar him from “acting as a broker or investment adviser or otherwise associating with firms that sell securities or provide investment advice to the public. FINRA has barred this individual from acting as a broker or otherwise associating with a broker-dealer firm.”

Wimmer admitted in U.S. District Court on Tuesday that he never told would-be investors of the sanction – a fact several of them corroborated to the Index-Journal.

The tool can be particularly important for somebody thinking of retaining an independent financial consultant who doesn’t have the backing of a major bank or lending house.

“One of the first things a potential investor should consider is FINRA’s BrokerCheck. They do an excellent job in vetting everyone’s personal and professional background. It’s a free service and it’s a quick and easy way to begin verifying both a firm and/or an individual that they may be considering a relationship with,” said Stephen Akin, of Greenwood-based Akin Investment Advisory. “In the case of Lee Wimmer, he hadn’t been registered for years. That should have been a red flag.”

Akin is a member in good standing with no complaints against him, according to FINRA.

With assets of $1 million under his watch, Akin said he created a layer of accountability between himself and his clients’ money.

“I have my business set up to where I don’t take custody of any cash and/or securities, and I don’t have access to withdraw any kind of fees from a customer’s account,” Akin said. “I receive my fees separately. I provide completely independent, unbiased information, planning, research and portfolio management for my clients.”

Why?

“The bottom line is, if the representative or the firm has any access to any part of the funds, securities or accounts in any way, there will be the potential for an inherent conflict,” Akin said.

In documents to U.S. District Court Judge Henry M. Herlong Jr., Wimmer explained where his plan went wrong. He decided to merge individual accounts – 29 of them – into a single corporate portfolio, promising annual yields of between 8 and 10 percent on their interest rates.

“By my managing just the one corporate portfolio, it would be much easier and technologically efficient to provide management of the assets,” Wimmer wrote in a Sept. 27 letter to Herlong.

The problem, as Wimmer laid out, was that each preferred security carried both an asset value and “coupon rate,” which is the yield returned on a fixed-income security.

“While the investors may have been receiving credit each month for their coupon interest rate, the preferred asset value was not keeping its value, but was reported on statements as if it was,” Wimmer wrote.

The S&P 500, which monitors the performance of the 500 largest and most stable companies in the New York Stock Exchange, has a current annual return of 12.25 percent from 1923 through 2016.

But according to 2015 analysis by Dalbar, the nation’s leading financial services market research firm, the average investor saw a total yearly return of just 2.5 percent.

In court on Tuesday, Wimmer’s attorney, David Aylor, said the market volatility led to “truly reckless investments” that led to personal ruin for his client as well, to the tune of about $650,000.

“We’re not asking his victims to feel sorry for him, but to point out it’s not a usual Ponzi scheme,” Aylor said. “His money was going right along with investors.”

Contact staff writer Adam Benson at 864-943-5650 or on Twitter @ABensonIJ.