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Utah securities regulators have dropped fraud charges against two former First Western Advisors' stockbrokers and offered a rare apology for any damage done to their reputations.

Brian G. Kasteler and David A. Russon last week were named in a Utah Securities Division action that accused First Western and several of its current and former brokers with generating excess commissions by making inappropriate investments for nine of their more well-heeled clients.

"The state finally listened" to our explanation, Russon said. "They listened too late, but they finally listened, and we're grateful for their expression of regret."

The state's petition contended those nine investors, with more than $20.6 million invested at First Western, paid "tens of thousands of dollars" in excess commissions when brokers placed their money in "Class B" mutual fund shares rather than in lower-commission "Class A" shares.

Many mutual funds offer more than one class of shares that carry different fees and expenses. Although those funds may have the same investment objectives, the varying fee structures cater to investors with different goals or plans, such as the length of time they intend to keep their money tied up in the funds.

Kasteler and Russon said they met with state securities division representatives last week and presented evidence on how the investments they recommended to their clients had performed.

"Their view of the case seemed to change after that," Kasteler said. "And to their credit they looked into the facts and came to the correct conclusion."

In a statement, the division simply said the charges had been dropped.

The state's allegations were prepared and filed by Securities Division Director of Licensing George Robison, who acknowledged that none of the broker's clients ever complained to state regulators. Nor had investigators talked with Kasteler or Russon before the charges were filed.

Rather, the state's case was the result of information gathered from the U.S. Securities and Exchange Commission during one of its periodic brokerage audits.

"We don't even think [their clients] knew they were victims," Robison said, last week.

Yet Kasteler and Russon said their clients were upset at hearing themselves characterized as victims. Several contacted the state and let regulators know that they continued to be happy having Russon and Kasteler as their brokers.

"And those who know us didn't believe [the state's allegations] for a minute," Kasteler said.

The state, however, asked one thing in agreeing to drop all charges against the pair.

It requested that the brokers contact their clients and offer them the option of converting their Class B shares to Class A shares or offer to return the less-than-1-percent difference in the expenses paid to buy Class B rather than Class A shares.

"We've already done that, and none of our clients have taken us up on that offer," Russon said.

State charges are still pending against First Western and two other brokers.

First Western spokeswoman Lisa James said the dismissal of charges against Kasteler and Russon was welcome news. She said First Western also is seeking a resolution of issues with the state.