David Wulf may stand alone in the crosshairs of the criminal prosecutors, but his fate will impact the NPS preneed trustees (and possibly other registered investment advisors who manage death care funds).

Mr. Wulf had a situation that is unique from what existed in Illinois, Wisconsin, and Tennessee, but is familiar to other death care funds. Mr. Schainker was an employee of Merrill Lynch, which proved to be the deep pocket for the IFDA losses. The Hull brothers were employees of Smith Barney, which has been alluded to by the WFDA Receiver as one of those parties with liability exposure. (The same Smith Barney that had relationships with Mark Singer, the Clayton Smart advisor.) But, Mr. Wulf’s name has not been associated with any Wall Street brokerage firm. Rather, he seems to have been an ‘independent’ asset manager who relied upon his own reputation (or connections) to obtain clients, and only bound by the duties imposed by the type of securities license that he possessed, Missouri law and the contract he had with NPS and the preneed trustee. Knowing that Mr. Wulf has shallow pockets, prosecutors will seek to define the investment advisor’s duties under Missouri such that Mr. Wulf had responsibilities to both funeral homes and consumers. For this to be something other than an academic exercise, the government attorneys must show that NPS’ preneed trustees also shared Mr. Wulf’s duties to the funeral homes and consumers. If the government attorneys prove successful, preneed trustees that have delegated fund management should take note.