The Maryland Insurance Administration suspended the insurance license of Everest Wealth Management on Thursday after the Maryland attorney general’s office handed down steep penalties this week to the Towson firm and its owner for alleged fraudulent misrepresentation of the risks of their investment strategy.

The order, issued Thursday by Maryland Insurance Commissioner Al Redmer Jr., also suspends owner Philip Rousseaux’s insurance producer license, effective immediately. Everest, known for its “Money Guys” infomercials, and Rousseaux can contest the suspension at a public hearing April 6.

Rousseaux said he learned of the insurance administration’s order when asked about it by The Baltimore Sun. He declined to comment, citing a gag order related to settlement negotiations with the insurance administration.

The insurance administration sought in December 2015 to revoke the insurance licenses of Everest and Rousseaux. The adminstration also sought $62,400 in fines.

During several days of hearings in October, Everest denied wrongdoing and argued that the penalties levied against the company are unfairly harsh. The administration and Everest subsequently entered settlement discussions that would have allowed Everest to stay in business.

But following the order from the attorney general’s office, Redmer decided he needed to take immediate action.

“Our number one job at the Maryland Insurance Administration is to protect Maryland citizens regarding their interaction with the business of insurance,” Redmer said. “I believe that the proper course of action is for us to remove Mr. Rousseaux from the insurance industry.”

Everest’s business is aimed at working-class investors, including police officers and firefighters, near or in retirement. He established Everest about 12 years ago and had about 2,000 clients and about $200 million in client assets for which his firm serves as the agent of record in 2015.

Rousseaux also owns Everest Investment Advisors, which provides financial advice, and shares employees and clients with Everest Wealth Management.

If Everest can no longer serve as an insurance brokerage, the firm’s clients, who buy products such as annuities from insurance companies through Everest, likely would be reassigned by the insurance companies to another agent, according to Tracy Imm, the insurance administration’s spokeswoman.

Attorney General Brian E. Frosh announced in June 2015 that the securities division of his office was investigating Everest Wealth Management, Rousseaux and his investment advisory business for multiple securities violations.

At the time, Frosh accused the companies of multiple violations of Maryland securities laws, including fraud in connection with the offer, sale or purchase of securities; and dishonest and unethical practices. The attorney general has not alleged that client funds were misappropriated.

Everest sued the attorney general’s office later that year, seeking to bar any action by its Maryland Securities Division, but the suit was dismissed.

The order handed down this week by the attorney general’s office said that Everest Wealth Management had operated as an investment adviser without being registered as such.

That order, written by Special Assistant Attorney General Sarah McCafferty, barred Everest Wealth Management and Rousseaux from the investment advisory business. McCafferty’s order also revoked Rousseaux’s investment adviser registration, revoked for one year Everest Investment Advisors’ registration, and fined the companies and their owner a combined $255,000.

Everest previously denied the allegations and said Wednesday it would appeal the attorney general’s order in Circuit Court. It has 30 days from March 28 to file such an appeal.

“Now that we finally are out of the rigged administrative law system, we look forward to the appeal and finally having a neutral Circuit Court judge review our case,” Rousseaux said in a statement Wednesday. “The law is on our side, and we are confident we will prevail on the merits of the case.”

The insurance administration will decide at the April 6 public hearing whether to uphold the suspension order against Everest and Rousseaux. If the agency upholds the suspension, Everest can appeal the decision to the Circuit Court.

In addition to its infomercials, Everest has sponsored Orioles radio broadcasts on WJZ-FM and has advertised in The Baltimore Sun.

sarah.gantz@baltsun.com

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