A board member of First Trinity Financial Corp. has called on state regulators to investigate the Tulsa-based insurance company, which has about 4,700 shareholders in Oklahoma.
Wayne Pettigrew, who served in the Oklahoma House of Representatives from 1994 to 2004, said he has sent letters to the Oklahoma Insurance Department and Oklahoma Securities Department asking the agencies to examine the conduct of First Trinity Chairman and CEO Gregg Zahn.
Zahn claims Pettigrew is angry that the board of directors recently voted not to reappoint Pettigrew as a director, and he is now trying to cause problems for the company. Zahn said Pettigrew was not qualified to serve on the board, which voted unanimously at its last meeting not to reappoint him to his board seat.
His last day is May 1.
“Mr. Pettigrew is just angry. He was voted out because nobody wanted him there. Everything he is saying is lies,” Zahn said.”
Pettigrew's letters question a run-in with the law Zahn had in Montana and also claim the CEO tried to hide his ownership of First Trinity stock from his now ex-wife during divorce proceedings several years ago.
First Trinity owns First Trinity Life Insurance Co. and First Trinity Capital Corp. The company was founded in 2004 and raised about $26.4 million in equity through private placements and two public offerings in Oklahoma.
Zahn also was charged with securities fraud and theft in Montana in 1997 for his involvement in a now-defunct company called AmWest Financial Network Inc., according to court records supplied by Pettigrew. The charges claim Zahn and his associates allegedly made false and misleading statements to investors in AmWest.
In a deferred prosecution deal with prosecutors, Zahn agreed to a lifetime ban from the securities industry, according to documents obtained by Pettigrew.
When First Trinity was founded in 2004, Zahn faced sanctions from the Oklahoma Insurance Department because of his past involvement with AmWest, according to agency records. The sanctions barred Zahn from serving on the company's board of directors, and he had to relinquish his power to vote his stock in the company, among other provisions. However, the sanctions were lifted 15 months later at the direction of former Insurance Commissioner Kim Holland, documents show.
Zahn said all of the information Pettigrew has released has been properly disclosed to shareholders and approved by state regulators.
“Mr. Pettigrew doesn't have a clue what he is talking about,” he said.
Zahn also added that he would meet with his attorney next week to consider taking legal action against Pettigrew.
Pettigrew said he feels obligated to share the information with Oklahomans who own stock in First Trinity.
“I have to let people know in case all of this stuff comes out later after I've left the board,” he said.
Insurance Department spokesman Kelly Collins said the agency could not comment on whether it would investigate First Trinity because investigations are confidential.
Irving Faught, administrator of the Oklahoma Securities Department, said he had not yet reviewed Pettigrew's letter and could not comment further on the matter.