SAN FRANCISCO - Frank J. Husic said he voluntarily surrendered his chartered financial analyst designation last year to avoid "hassles" from the Association for Investment Management and Research, Charlottesville, Va., over advertising that his firm was compliant with the AIMR's investment performance standards.
He was adamant that the surrender of his CFA and AIMR membership hasn't had an impact on his money management business.
"I gave it up because I wanted to," said Mr. Husic, managing partner, chief investment officer and founder of Husic Capital Management, San Francisco. "AIMR is a voluntary, non-regulatory, professional organization. The bulk of people in our business do not join AIMR. Most of my peers, of my generation in the business, do not belong to AIMR."
Most AIMR members are young analysts, he said. Mr. Husic started his company in 1986 and has been in the investment management business since 1972.
When pressed for a reason for the surrender of his CFA charter, Mr. Husic said, "I didn't want to go through a lot of hassles" about a problem he'd had several years ago with AIMR - while his performance numbers had been compliant, an audit had not been conducted to certify them.
"I have a lot of other things on my plate right now - a bear market, Bill Stephens' arrest and two young sons, aged 1 and 2." (Mr. Stephens, formerly chief investment strategist at Husic, was acquitted in February of seven charges of trying to steer union pensions funds into a bribe and kickback scheme.)
People familiar with Husic Capital, who spoke on condition of anonymity , said the AIMR "hassle" involved Husic's use of the "AIMR-compliant" label before the audit had been completed.
Mr. Husic said his company's numbers have always been AIMR-compliant and that there has never been any problem with the quality of numbers reported. Husic Capital managed $1.8 billion in active domestic growth equities, mainly for institutional clients, as of Dec. 31, the most recent number available.
Lauri K. Keen, a member of AIMR's professional conduct program-compliance, confirmed in writing to Pensions & Investments that Mr. Husic is no longer an AIMR member or CFA charter holder. She said Mr. Husic initiated the resignation and AIMR does not require members to give a reason for resignation.
Rochelle Smith, an AIMR spokeswoman, said CFA charter holders most commonly surrender their charter and membership because they are retiring or are leaving the money management business.
People familiar with Husic Capital Management said Mr. Husic had been the subject of an AIMR inquiry in 1998 regarding an incorrect listing of Mr. Husic's educational credentials on the company's ADV filing with the Securities and Exchange Commission (P&I, Oct. 19, 1998).
Mr. Husic said his clients' only reaction to his surrender of the CFA charter was to ask, "Are you okay?" "Clients have been stable and supportive and have stood behind us," he said, adding that few clients have terminated his money management company.
Some Husic clients contacted by P&I were unaware that Mr. Husic had surrendered his CFA designation and AIMR membership and therefore declined to comment on the record until they learned more about the situation.
What clients have been wondering about, Mr. Husic said, was the resignation of Kenneth B. Weeman as chief operating officer. Mr. Weeman joined Husic in February this year, and the firm's website still lists him as COO. Mr. Weeman and Joseph Rusbarsky, head-client relations, marketing and sales, both came to Husic from Dresdner RCM Global Investors Inc., San Francisco.
Mr. Husic said Mr. Weeman came out of retirement to join Husic and decided after four months that he no longer wanted to work there. Market rumor has it that Mr. Weeman left because a proposed equity ownership scheme was not executed, although Mr. Husic denied that was the reason for Mr. Weeman's departure and said the firm is still working on introducing equity ownership.
Neither Mr. Weeman nor Mr. Rusbarsky returned calls seeking comment.