Supreme Court Seal
Supreme Court Seal
South Carolina
Judicial Branch

The Supreme Court of South Carolina

In the Matter of Candy M. Kern, Respondent.

Appellate Case No. 2021-000273




Respondent has submitted a motion to resign in lieu of discipline pursuant to Rule 35, RLDE, Rule 413, SCACR.  Respondent faces three separate disciplinary complaints related to her role in an illegal scheme of inducing veterans to sell their retirement or disability benefits in exchange for cash payments.  The first complaint involves a federal lawsuit filed by three veterans alleging Respondent and others illegally induced the veterans to sell their retirement or disability benefits for a period of months or years in exchange for a lump sum payment.  The second complaint was filed by an Arizona life insurance agent who sold to four of his clients military income stream investments that were processed by Respondent.  The agent filed a complaint with Disciplinary Counsel after his clients stopped receiving payments, and the agent could not reach Respondent to inquire about the payments.  In the third complaint, a South Carolina lawyer represented three veterans who had assigned their military benefits in exchange for lump sum payments in connection with Respondent's scheme.  Each of the veterans defaulted on the agreement to assign their benefits because they learned the assignments were illegal.  After Respondent filed suit against each of the veterans in Greenville County, the veterans' lawyer filed a complaint with Disciplinary Counsel based on her belief the transactions were void from inception pursuant to federal law.

Respondent has also been involved in several other lawsuits regarding this illegal financial scheme.  In 2018, the Securities Division of the Arizona Corporation Commission (Corporation Commission) filed an enforcement action alleging the income stream investments were unregistered securities that were prohibited by federal and state law.  Respondent and her law firm were named parties.  On November 12, 2020, the Corporation Commission issued an order finding Respondent made, participated in, and induced offers and sales of unregistered securities in violation of the Arizona Securities Act.  The order further found Respondent acted in a reckless and unethical manner and continued to be involved in unlawful sales of securities after multiple cease and desist orders from other states found similar investments violated securities laws in those jurisdictions.  The Corporation Commission found the description of Respondent's law firm's role in the investment scheme marketing materials gave confidence to investors that induced the unlawful sale of these securities and deceived the investors into a false sense of the investment's safety.  The Corporation Commission ordered Respondent to pay restitution, jointly and severally with other parties, in the total amount of $2,943,438.60, plus administrative penalties in the total amount of $560,000.

Additionally, the Bureau of Consumer Financial Protection, the South Carolina Department of Consumer Affairs, and the State of Arkansas filed a complaint in the United States District Court for the District of South Carolina against Respondent, her former law partner, and their law firm alleging various violations of state and federal law in connection with selling veterans' disability benefits to investors.  On January 21, 2021, the federal court signed a stipulated final order and judgment permanently restraining Respondent from: (1) brokering, offering or arranging purported sales or assignments of pensions and disability benefits, including extensions of credit related to pension or disability benefits; (2) any collection activity related to any contract purporting to sell or assign a consumer's pension or disability benefits or any alleged debt arising from the purported sale or assignment of a consumer's pension or disability benefits; and (3) engaging in any financial-services based business in the State of South Carolina—including the business of securities, commodities, banking, insurance, or real estate—unless acting in the regular course of the practice of law.  The district court ordered Respondent to pay equitable monetary relief, jointly and severally with her former law partner and law firm, in the amount of $725,000.  The district court also prohibited the use of customer information, ordered additional monetary provisions, and implemented reporting requirements and other compliance provisions.  

Respondent's misconduct as set forth above is deemed to have been conclusively established for the purposes of our consideration of Respondent's motion to resign in lieu of discipline.  Rule 35(b), RLDE, Rule 413, SCACR.  In the affidavit attached to her motion, Respondent acknowledges that Disciplinary Counsel can prove the allegations against her and states she does not desire to contest or defend against those allegations. 

We find Respondent's egregious pattern of conduct violated the following Rules of Professional Conduct in Rule 407, SCACR: Rule 1.4 (failing to explain transactions to the extent necessary to permit clients to make informed decisions regarding the representation); Rule 1.5 (charging unreasonable fees); Rule 1.7 (representing investors and veterans without informed consent confirmed in writing regarding the conflict of interest); Rule 8.4(d) (engaging in conduct involving dishonesty, deceit, or misrepresentation); and Rule 8.4(e) (engaging in conduct prejudicial to the administration of justice).  Accordingly, we grant Respondent's motion to resign her membership in the South Carolina Bar.  In accordance with the provisions of Rule 35, RLDE, Respondent's resignation shall be permanent.  Respondent will never again be eligible to apply and will not be considered for admission or reinstatement to the practice of law or for any limited practice of law in South Carolina.

Within fifteen (15) days from the date of this order, Respondent shall file an affidavit with the Clerk of this Court showing Respondent has complied with Rule 30, RLDE, Rule 413, SCACR, and shall also surrender her Certificate of Admission to Practice Law to the Clerk of this Court.


s/Donald W. Beatty                        C.J.

s/John W. Kittredge                           J.

s/Kaye G. Hearn                                J.

s/John Cannon Few                           J.

s/George C. James, Jr.                      J.

Columbia, South Carolina
August 4, 2021