IN THE MATTER OF: NORTH CAROLINA SECURITIES DIVISION, Petitioner, FINAL CONSENT ORDER vs. EMZPOWERED INVESTOR INCORPORATED (CRD #155251), JAMES DARYL UPHAM (CRD #5507214), and FILE NO. THOMAS COWART GOOLSBY (CRD #5856947), Respondents. THIS CAUSE coming on to be heard and being heard before the Secretary of State of North Carolina as Administrator (the ?Administrator?) of the North Carolina Investment Advisers Act (the ?Investment Advisers Act?) and the North Carolina Securities Act (the ?Securities Act?); and IT APPEARING to the Administrator that the undersigned Respondents Empowered Investor Incorporated James Daryl Upham (?Upham?), and Thomas Cowart Goolsby (?Goolsby?) desire to resolve the contentions of the Securities Division (the ?Division?) in this matter, without further controversy or the full use of the procedural rights available to them under North Carolina law, and that Respondents, by their written consent to this Final Order, do not object to the making of Findings of Fact and Conclusions of Law and the entry of a Final Order in conformity therewith in this proceeding. The Administrator hereby makes the following: FINDINGS OF FACT 1. Respondent E1 is a North Carolina corporation with a principal of?ce located in Wilmington, North Carolina. E1 is registered with the Division pursuant to N.C.G.S. Chapter 78C as an investment adviser. 2. Respondent Upham is a North Carolina resident with a residential address in Wilmington, North Carolina. Upham is registered with the Division pursuant to N.C.G.S. Chapter 78C as an investment adviser representative associated with E1. 3. Respondent Goolsby is a North Carolina resident with a residential address in Wilmington, North Carolina. Because he has engaged in the solicitation of advisory clients through his participation in a weekly radio show conducted by Respondents, Respondent Goolsby is an investment adviser representative. As a 50% owner of E1 who engages in the management of El, he is automatically registered under N.C.G.S. Chapter 78C-17(a) as an investment adviser representative for El. 4. The Administrator has jurisdiction over the subject matter of this proceeding and over the persons of the Respondents pursuant to the Investment Advisers Act. 5. Respondents admit the jurisdiction of the Division, do not admit the Findings of Fact or Conclusions of Law set forth in this Final Order, and consent to the entry of this Final Order by the Administrator. 6. Respondents have agreed to resolve this matter through this Final Order to avoid ?irther protracted and expensive litigation. Respondents, as evidenced by the authorized signatures below, consent to thejurisdiction of the Administrator, consent to the entry of this Final Order, and expressly and permanently waive any and all rights under the Act, the North Carolina Administrative Procedures Act or any other law to a notice of hearing, hearing, the making of any ?ndings of fact and conclusions of law, and all further proceedings before the Administrator to which they may be entitled related to the subject of this Final Order. Respondents expressly and permanently waive all right to seek judicial review or otherwise challenge the validity of this Final Order. 7. Respondents enter into this Final Order solely for the purpose of resolving the controversy between the Division and the Respondents. Respondents do not intend for their consent to the entry of this Final Order to be construed for any other purpose. Respondents assert that the Findings of Fact and the Conclusions of Law contained in this Final Order shall not constitute admissions on the part of Respondents for any purpose whatsoever. 8. Respondents Upham and Goolsby are the co-owners of Respondent E1. 9. As co-owners and managers of Respondent EI, Respondents Upham and Goolsby control and direct the actions of Respondent EI. 10. Respondents engage in offering and providing investment advisory services, including investment account management services, to the investing public in North Carolina for compensation and as part of a business. 11. From 2010 through 2013, Upham and Goolsby engaged in the production of a weekly radio show broadcast from Topsail Beach, North Carolina, wherein they discussed investment advice and investment strategies for the purpose of soliciting advisory clients for E1. 12. During their weekly radio programs, Respondents Upham and Goolsby repeatedly represented to listeners, including prospective advisory clients, that they utilize a program they call the ?10-20-50 Plan? in managing their clients? investment accounts. As described by Respondents, in utilizing the ?10-20-50 Plan,? any investment that decreases in value by 10% will be sold to limit further loss, any investment that increases in value by 20% will be sold to capture that pro?t, and no more than 50% of the client?s account value will be invested in securities at any one time. 13. In managing their clients? investment accounts, Respondents implemented investment strategies that were different from and that con?icted with the provisions of the ?10-20-50 Plan.? For example, Respondents frequently refrained ?'om selling clients? investments that had declined in value more than 10%, thereby causing greater losses than would have occurred had they observed the 10% loss in value trigger. Respondents also frequently invested more than 50% of the value of a client?s account in a single security, contrary to the 10-20-50 strategy that they had publicized in their solicitation of clients. 14. Respondents also failed to inform their existing clients that they were not employing the ?10-20-50 Plan? in managing their clients? accounts, and Respondents were in fact implementing investment strategies and practices different from and inconsistent with the ?10- 20-50 Plan.? 15. Clients of E1 expected and believed, based upon the statements made by Respondents, that their accounts at E1 would be managed in accordance with the ?10-20-50 Plan.? 16. Respondents did not disclose to their listeners and prospective clients that Respondent Upham was generating losses in the investment ?Jnds entrusted to him to manage by engaging in an investment strategy that was markedly different from and that con?icted with the strategy discussed on their radio show and which Respondents purported to use in managing their clients? accounts. 17. The acts and omissions of Respondents in their solicitation of advisory clients constitute violations of N.C.G.S. 18. The acts and omissions of Respondents in their management of their advisory clients? accounts constitute violations of N.C.G.S. and 18 NCAC 06A.1801. BASED UPON THE FOREGOING Finds of Fact, the Administrator makes the following: CONCLUSIONS OF LAW 1. The Administrator has statutory authority pursuant to N.C.G.S ?78C-19(a) to enter and issue a revocation of the investment adviser registration of Respondent EI, and the investment adviser representative registrations of Respondents Upham and Goolsby. 2. Violations of N.C.G.S. and 18 NCAC 06A.1801 provide grounds for revocation of an investment adviser and an investment adviser representative registration. 3. There is reasonable cause to believe that each Respondent has engaged in violations of the Investment Advisers Act, speci?cally N.C.G.S. and 18 NCAC 06A.1801. 4. The entry of this Final Order is necessary and appropriate in the public interest and for the protection of investors and clients, and is consistent with the purposes fairly intended by the policies and provisions of the North Carolina Investment Advisers Act. NOW, THEREFORE the Administrator, acting through her duly appointed Deputy Securities Administrator, pursuant to and under all authority granted by the North Carolina Investment Advisers Act, and based upon the foregoing Findings of Fact and Conclusions of Law does hereby enter the following Final Order: ORDER IT IS HEREBY ORDERED, with the consent of the Respondents without admitting any of the facts and conclusions contained herein, that: a. The investment adviser registration of Respondent EMPOWERED INVESTOR INCORPORATED (CRD #155251) shall be and is revoked; b. The investment adviser representative registration of Respondent JAMES DARYL UPHAM (CRD #5507214) shall be and is revoked; c. The investment adviser representative registration of Respondent THOMAS COWART GOOLSBY (CRD #5856947) shall be and is revoked; (1. Respondents EMPOWERED INVESTOR INCORPORATED, JAMES DARYL UPHAM, and THOMAS COWART GOOLSBY shall cease and desist from violating any statute, rule or regulation promulgated under the North Carolina Securities Act, the North Carolina Investment Advisers Act, or the North Carolina Commodities Act; e. Respondents EMPOWERED INVESTOR INCORPORATED, JAMES DARYL UPHAM, and THOMAS COWART GOOLSBY shall cease and desist from engaging in any conduct or practice involving any aspect of the securities or ?nancial services business and from transacting any business as an investment adviser, investment adviser representative, dealer, or salesman in this State; f. Respondents EMPOWERED INVESTOR INCORPORATED, JAMES DARYL UPHAM, and THOMAS COWART GOOLSBY shall not seek registration in this State as an investment adviser or investment adviser representative pursuant to N.C.G.S. Chapter 78C or as a dealer or salesman pursuant to N.C.G.S. Chapter 78A for a period often (10) years from the date of entry ofthis Final Order; and g. This Final Order shall be effective upon entry. Respondents, by consenting to the entry of this Final Order, waive any right to a hearing orjudicial review thereof. Respondents affirmatively state that they have freely agreed to the entry of this Final Order, and that no threats, promises or offers of any kind, other than as stated in this document, have been made by the Securities Administrator, Deputy Securities Administrator, any member ofthe staff ofthe Securities Division, or any agent or employee of the Department of the Secretary of State in connection with the entry of this Final Order. WITNESS MY HAND AND OFFICIAL SEAL of the North Carolina Department of the Secretary of State, this the 2 day of 27 2014. Time ofentry: [2 i EM. ELAINE F. MARSHALL SECRETARY OF STATE OF NORTH CAROLINA and Securities Administrator By' David?s?. Deputy Securities inistrator CONSENT TO ENTRY OF FINAL ORDER INVESTOR Empowered Investor Incorporated. as 1111 investment here-b} aeltnott1edges that it has read. understands and consents to the entry ol?the foregoing FINAL ORDER. agreeing to this FINAL. ORDER, Respondent Empowered Investor Incorporated does not admit the Findings o?-?aet or Conclusions 01' Law. but does not contest the jurisdiction 01' the North Carolina Secretary ol'Stute: waives all objections to the Findings of Fact and Conclusions of Law contained in this Final Order; and consents to the entry oi'this Final Order by the North Carolina Secretary as settlement ol'the matters described in this Final Order. Dated this the day ol" April. 21) 4. Km powered Investor Incorporated \?oiitr; Public ANNAMARP ontmissi 1: PUBLIC NEW CONSEVT T0 ENTRY OF FINAL ORDER JAMES DARYL 1.5 PHAM James Daryl l?pham. HS 2111 investment adviser representative. hereby acknowledges that he has read. understands and consents to the entry ol'the foregoing FINAL ORDER. By agreeing to this FINAL ORDER, Respondent Uph?dm does not admit the Findings of Fact 01? Conclusions 01' Law. but does not contest the jurisdiction ol'the North Carolina Secretary ot?Stutc: waives all objections to the Findings 01. l-?net and Conclusions oflmt contained in this Final Order: and consents to the entry ol'this Final Order by the North Carolina Secretary of State as. settlement ol' the matters described in this Final Order. Dated this the day of April. 2014. State ol? North Carolina .. ?ng W_0_Q3E-Cotmty SUBSCRIBED AND SWORN to before me this __28 day ol?April, 20H. J?m . Notary Pu} ilL' NOTARYPU NEW HANOVER WNW, NC My Comn TO BY COUNSEL. FOR 21-15 CONSENT TO ENTRY OF FINAL ORDER THOMAS COWART GOOLSBY Thomas owart Goolsby, as an investment adviser representative, hereby acknowledges that he has read, understands and consents to the entry of the foregoing FINAL ORDER. By agreeing to this FINAL ORDER, Respondent Goolsby does not admit the Findings of Fact 01? Conclusions of Law, but does not contest the jurisdiction of the North Carolina Secretary of State; waives all objections to the Findings of Fact and Conclusions of Law contained in this Final Order; and consents to the entiy of this Final Order by the North Carolina Secretaiy of State as settlement of the matters described in this Final Order. Dated this the ES day oprril, 2014. .r Thom}? Coxxrar?f?coolsb?g?? State of North Carolina County SUBSCRIBED AND SWORN to before me this 4% day of April, 2014. - - wwsmis 11$? ?04" Wiener? is ?tor? . a 0 1y Public . a; 06? N: My Commission Expires: ?chQ/ngg (49/ CONSENTED TO BY COUNSEL FOR RESPONDENT GOOLSBY {$7712. :2 ?56? 0L .. 7? MES L. ALLARD JR., Attorney aU?w