NEWPORT — Alleged financial mismanagement by a New London-based financial adviser has upended the lives of scores of elderly retirees, some who have had to return to work in their 70s at entry-level wages to make ends meet. Others report the financial losses have led to agonizing decisions as aging loved ones require assisted-living care.

Thomas Chadwick has been ordered to pay back more than $11 million he lost for clients — most of them elderly retirees on fixed incomes — after he put their money into a high-risk investment fund that collapsed and wiped out their retirement savings.

Chadwick, a former partner in defunct investment advisory firm Chadwick & D’Amato, also earlier had been found to be impersonating clients by using their usernames and passwords to access their brokerage accounts and continuing to operate as a financial adviser after his license had been terminated, state regulators said.

New Hampshire’s Bureau of Securities Regulation is now seeking that Chadwick, 53, be permanently barred from being licensed to work in the state’s securities industry and has gone to court to stop him from liquidating property and business assets that could be used to recover money lost to his clients, state court records show.

The actions come following two relief petitions granted state regulators, the first in 2022 and the second in June, ordering Chadwick to cease operating as an unlicensed financial adviser and to pay back to clients the money he allegedly lost. Chadwick has requested a hearing to contest the first order, and that proceeding is ongoing. He has 30 days to request a hearing from receipt of the second order, which was issued late last month, or it becomes final by default judgment, obligating him to pay back $11.1 million.

“He took us for $1.2 million,” said Kate Siepmann, of Strafford, whose partner, Ruth Whybrow, gave her money to Chadwick to manage. Siepmann sued — and won — to enforce an arbiter’s ruling that found Chadwick mismanaged Whybrow’s retirement savings.

Chadwick first put Whybrow’s funds into his firm’s own managed investment fund. When that fund underperformed, he transferred the funds into high-risk investments that were “unsuitable” for Whybrow’s age and risk profile, the arbiter found in 2022.

The money would have been used to care for Whybrow, who is suffering from dementia and requires residential assisted-living care. Siepmann said she now struggles to meet the monthly bills.

“This was money to pay for Ruth’s care for the rest of her life,” Siepmann said. “Now we’re approaching scratching.”

Contacted on Friday, Chadwick replied via email: “… Given more time, I could have crafted a proper response, but these are open legal issues where I can’t respond on short notice.”

A prime market

Co-founded in 2000 by Chadwick with partner Anthony D’Amato — who regulators said is not implicated in any wrongdoing — Chadwick & D’Amato was an investment management and financial advisory firm that catered mostly to clients in New Hampshire, Vermont and Massachusetts, according to the firm’s website, which has been discontinued.

Because of an economy buoyed by wealthy institutions like Dartmouth College and Dartmouth Hitchcock Medical Center, the Upper Valley is rife with financial advisers and wealth managers: New London, with a population of 4,301 people, is home to eight financial advisory firms, while Hanover has 17 and Lebanon has 18, according to Securities and Exchange Commission data.

Although the firms cater to some wealthy clients, they also have a solid business in helping middle-income retirees manage their money, which typically calls for prudent husbanding of resources in order to protect from volatility in the financial markets.

But Chadwick’s clients, who state financial regulators said were mostly elderly low- to moderate-risk investors who relied on fixed incomes to support their retirement, typically had 50% to 92% of their money put into a “double-leverage” financial product with the bewildering name “Credit Suisse X-Links Monthly Pay 2xLeveraged Mortgage REIT Exchange Traded Notes,” or REML, for short.

REML was immensely complex, even by Wall Street’s esoteric financial engineering, and tied to the mortgage market. Investing in REML could lead to outsize gains but also came with huge risk: Credit Suisse even warned potential investors that REML shares should not be held for more than 30 days and pointedly said the product was not meant for people who rely upon fixed incomes.

Nonetheless, state financial regulators said that between the fall of 2017 until December 2021, Chadwick invested “most of his clients’ funds” into REML — and held shares in their accounts for an average of 386 days.

REML shares were trading in the mid-$20 range in February 2020, but when COVID-19 hit a month later and businesses shut down and office buildings emptied en masse, the shares of REML — which was heavily exposed in the commercial real estate sector — collapsed. The value of many of Chadwick’s clients’ retirement portfolios largely evaporated along with it, regulators said.

Chadwick “displayed a fundamental misunderstanding of REML’s complexity and risk,” the state’s Bureau of Securities Regulation said in a news release. “He failed to act in his client’ best interests and breached his fiduciary duty of care and loyalty.”

The regulators’ petition lists a total of 68 accounts — many that include married or partnered couples — with financial losses per account ranging from $1,920 to $905,000. The average loss after gains from dividend payments are subtracted was $163,364 per account, data shows.

The petition does not disclose how much money in total each client entrusted Chadwick to manage, nor is it known when Chadwick received notice of the order. But the bureau issued its news release on July 27, in which it said Chadwick has 30 days to request an administrative hearing; if he doesn’t request a hearing in that time, he will be liable by default for the $11.1 million restitution.

Following what it says were “dozens” of interviews conducted with affected clients who are identified only by their initials, the petition details the financial losses of 36 accounts and why REML was inappropriate for their needs.

Nearly all reside in the Upper Valley: among the 36, five clients are from Lebanon; three from Sunapee; two each from Hanover, Woodstock and Thetford Center; and others from such Upper Valley towns as Hartland, Norwich, West Lebanon, Barnard, Newport and Fairlee. Clients also came from farther afield, including Middlebury, Vt.; Marlborough, N.H.; Sutton, N.H.; Wellfleet, Mass.; Scottsdale, Ariz.; and Saint Simons Island, Ga.

One former client who asked to not be identified told the Valley News in an interview that they had been “fully retired,” but the hit to their retirement savings when REML collapsed in 2021 has meant that they have had to go back to work at low wages to make up for the losses.

Familiar in New London

Chadwick is a familiar name around New London.

Thomas Chadwick’s aunt, Marion Hafner, and her husband, Charles, operate Chadwick Funeral and Cremation Service, a more than century-old business that Thomas Chadwick’s grandfather purchased from an uncle in 1957.

Chadwick himself grew up in New London, he told the Valley News in 2017 when, as half-owner of New London’s Peter Christian’s Tavern, he embarked on a project to renovate and build The Edgewood Inn on the site at 195 Main St., where Chadwick & D’Amato’s offices also were located. Chadwick, representing property owner Proudstone Corp., went before the town Planning Board in 2016 to detail the plans, explaining that he and his then-wife would occupy a the third-floor living quarters.

The regulators’ petition identifies numerous businesses and real estate in which Chadwick “initially held” interests, including the property and building at 195 Main St., The Edgewood Inn, the restaurant Peter Christian’s and The Gryphon restaurant in Burlington.

“Chadwick is actively engaged in the dissipation and division” of assets, regulators contend in their civil lawsuit in Merrimack County Superior Court seeking a restraining order to “preserve assets while the pending administrative matters are concluded.”

Court records show regulators won a temporary restraining order against Chadwick from selling assets, which was then followed on July 28 by a stipulated agreement in a preliminary injunction that allows Chadwick to make “reasonable business expenses.”

Siepmann, who like many people said she depends upon licensed financial advisers to wisely manage her money, said she is unsophisticated about investing but suspected something might not be right when she became her partner’s power of attorney and began checking the statements from Chadwick.

“I would open up her statement and there would be no gain, and this was when the market was booming,” Siepmann said.

“I’d ask (Chadwick) about this and he’d say, ‘Oh, it’s just the market’s fickle.’ He had this belief that if the market did badly, he would do well. He put that to me several times. That was his philosophy,” she said.

Contact John Lippman at jlippman@vnews.com.