In Schrenker v. State, Michelle Schrenker and her husband Marcus were the subjects of an action by the Indiana Securities Commissioner. Marcus Schrenker was registered as an investment advisor with the Indiana Securities Division, and he and Michelle were principals in investment firms called Heritage Wealth Management (HWM), Heritage Insurance Services (HIS), and Icon Wealth Management (Icon). The offices were leased to both Marcus and Michelle, and Michelle kept the books and was chief financial officer (CFO) for the three firms. She was paid $ 11,600 monthly, and the State asserts she “did not consider her position as CFO to be simply a title” She was the majority shareholder and a director of HWM. She handled the books, recordkeeping, and accounting for HWM and Icon, and had the authority to write checks and withdraw money from the HIS account.
The Indiana Securities Commissioner sought the appointment of a receiver over Michelle Schrenker’s assets. The trial court granted the appointment. The appointment was premised on the trial court’s conclusion that the advisor materially aided her husband and his corporations in violating the Indiana Securities Act and she was jointly and severally liable with and to the same extent as her husband and his companies by virtue of her position as Chief Financial Officer of three companies. The advisor had access to one of the company’s checking account. There was a substantial casual connection between the advisor’s culpable conduct, in the form of withdrawing investor funds from one company account, and the harm the investors suffered in the form of lost money. She materially aided her husband in violating the Securities Act. The appellate court affirmed the trial courts appointment of the receiver stating that it did not abuse its discretion.