The U.S. Circuit Court of Appeals questioned the allegations of prejudice raised by Jeff Camarda and his wife, Kimberly, against the Certified Financial Planner Board of Standards Inc. (CFP Board) during an appeals hearing.

Judge Laurence Silberman, a senior judge for the District of Columbia Circuit of the U.S. Court of Appeals, challenged the claims of the Camardas regarding actions taken by the CFP Board against their business. According to the lawyers for the plaintiffs, the organization specifically targeted the couple as subjects of an investigation. They allege the CFP Board engaged in selective enforcement. However, Silberman found this argument questionable.

During the appeals hearing, Silberman asked Jeffrey S. York, the lawyer representing the Camarda couple, on why they would assume that they were prejudiced in this case. According to the circuit judge, the CFP Board has every right to enforce the guidelines and rules of the organization to its members. With this in mind, Judge Silberman noted that the CFP Board had only been performing its duty when it probed on the authenticity of the “fee-only” advertising claims by the Camardas.

The issue started in 2013 when the Camardas brought the CFP Board to court. Both husband and wife are financial planners, working together as managing members of Camarda Financial Advisors. The couple alleged the organization committed a breach of contract as well as engaged in unfair competition and false advertising. The Camardas cited the Lanham Act as basis for the accusations.

For its part, the CFP Board’s involvement with the Camardas started when it initiated a disciplinary case against the couple. In the case, the organization questions the accuracy of the husband and wife’s claim that they are “fee-only” advisers. This claim by the business partners was in contrast with its practice of also collecting commissions from the deals with their clients.

The case of the Camardas was later on dismissed July 6 by U.S. District Judge Richard Leon. The federal judge noted the relationship between the CFP Board and the Camardas required the former to enforce rules and regulations. As part of its responsibilities to their members, the organization is also tasked to mete out disciplinary measures to those they found to be breaching their guidelines. Leon further noted that the courts are not keen on questioning the ruling of organizations especially when it comes to their own internal rules.

“The contractual relationship between CFPB and its certificants, such as plaintiffs here, permits CFPB to enforce the standards that it sets through certain disciplinary procedures,” wrote Leon in his decision. The federal judge added, “In reviewing a disciplinary action by a private organization, courts do not 'second guess' the organization's interpretation of its own rules or its evaluation of the evidence.”

In their case brought to the appellate court, the Camardas allege the CFP Board is using them to set a precedent to other members. That is, the couple’s business is being sanctioned by the organization to make an example out of them. This argument stemmed from York’s primary allegation that the CFP Board has engaged in selective enforcement.

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