Mark S. Diamond v. Office of the Commissioner of Insurance

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
November 19, 2020
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2020AP99 Cir. Ct. No. 2018CV3366

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT IV

MARK S. DIAMOND,

PETITIONER-APPELLANT,

V.

OFFICE OF THE COMMISSIONER OF INSURANCE,

RESPONDENT-RESPONDENT.

APPEAL from an order of the circuit court for Dane County:
JOSANN M. REYNOLDS, Judge. Affirmed.

Before Blanchard, Kloppenburg, and Graham, JJ.
No. 2020AP99

¶1 KLOPPENBURG, J. Mark Diamond appeals an order affirming a
decision of the Wisconsin Office of the Commissioner of Insurance.1 The
Commissioner determined that Diamond violated various statutory and regulatory
provisions that govern the conduct of insurance intermediaries.2 Specifically, as
pertinent to the issues raised on appeal, the Commissioner determined that
Diamond, an insurance intermediary: (1) advertised a free retirement workshop
that misled Wisconsin consumers by implication and omission in violation of WIS.
STAT. § 628.34(1)(a) (2017-18) and WIS. ADMIN. CODE § Ins 2.16(5)(a) (through
October 2020);3 and (2) recommended an insurance product transaction without
“reasonable grounds to believe that the recommendation [was] suitable for the
consumer” in violation of WIS. STAT. § 628.347(2)(a). As sanctions, the
Commissioner ordered that Diamond pay a forfeiture and restitution and revoked
his nonresident insurance agent license. The circuit court affirmed the
Commissioner’s decision except that it reduced the forfeiture imposed.

¶2 On appeal, Diamond argues that the Commissioner erred in
determining that the advertisement was misleading and that Diamond made an
unsuitable recommendation, that the Commissioner improperly imposed the

1
We will refer to the Wisconsin Office of the Commissioner of Insurance as OCI when
referencing actions taken by that agency prior to the issuance of the decision at issue, and as the
Commissioner when referencing the decision issued by the individual who heads the agency.
2
An “insurance intermediary,” commonly referred to as an agent, is a person who
engages or assists another in “[s]olicit[ing], negotiat[ing] or plac[ing] insurance or annuities on
behalf of an insurer or a person seeking insurance or annuities” or who “[a]dvises other persons
about insurance needs and coverages.” WIS. STAT. § 628.02(1)(a) (2017-18). Diamond does not
dispute that he at pertinent times was an insurance intermediary covered by the statutes and
regulations at issue.
3
All references to the Wisconsin Statutes are to the 2017-18 version unless otherwise
noted. All references to the Wisconsin Administrative Code are to the August 2020 version
unless otherwise noted.

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forfeiture even as reduced by the circuit court, and that the Commissioner’s
calculation of restitution was not supported by substantial evidence in the record.4
We conclude that substantial evidence supports the Commissioner’s
determinations of violations consistent with the applicable statutes and that
Diamond fails to show that the Commissioner or the circuit court improperly
imposed the reduced forfeiture or that substantial evidence does not support the
Commissioner’s calculation of restitution. Accordingly, we affirm.

BACKGROUND

¶3 The following facts are not disputed.

¶4 At all pertinent times, Diamond was an independent insurance agent,
operating as Mark Diamond & Associates. Diamond held a Wisconsin
nonresident insurance intermediary license from September 2014 until it was
revoked in November 2018.

¶5 In October 2015, Diamond placed an advertisement for “educational
workshops” in local Wisconsin newspapers. The advertisement promoted a
“SENIOR RETIREMENT WORKSHOP” presented by “Senior Education
Counsel.” Senior Education Counsel is the name of a non-profit corporation
operated by Diamond. A separate for-profit corporation, Retirement Planning
Services, Inc., owned and operated by Diamond’s wife, paid the expenses of

4
The Commissioner also determined that Diamond did not timely report administrative
actions taken against him by regulatory agencies in three other states, in violation of WIS. ADMIN.
CODE § Ins 6.61(16)(a). However, Diamond makes no argument that the Commissioner erred
with respect to the failure to timely report violations. Further, Diamond does not advance any
argument challenging the revocation of his license. Diamond concludes by asking that we
reverse the revocation, but he makes no argument in his briefing about the revocation.
Accordingly, we do not further address those aspects of the Commissioner’s decision.

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presenting the workshops. As promoted in the advertisement, the topics to be
discussed included, but were not limited to, protecting assets from catastrophic
illness and nursing homes, reducing taxes, getting “guaranteed returns” in an
unstable market, passing more retirement savings to heirs, and avoiding probate.
The advertisement stated “Nothing will be sold at this seminar.”

¶6 Diamond held two of the advertised “educational workshops” in
Neenah, Wisconsin. Diamond did not directly sell any products at the workshops
but gave participants evaluation forms that asked whether the participants were
interested in free consultations to learn more about the topics presented at the
workshops. Diamond subsequently met with participants who requested free
consultations; during the consultations he recommended and sold financial
products, for which he received commissions. Diamond has no clients in
Wisconsin to whom he sold insurance products aside from clients whom he met at
one of his workshops.

¶7 Helen and Clarence Lotzer attended Diamond’s workshop on
October 26, 2015. They completed the offered evaluation form and indicated that
they were interested in a free consultation. The Lotzers were in their seventies at
the time and were particularly interested in protecting their assets from nursing
homes because Clarence had begun to show signs of difficulty processing
information and of significant memory loss.

¶8 On October 29, 2015, Diamond met with the Lotzers at their home
for the consultation. At that time, the Lotzers owned three variable annuities with
a company called Voya, the largest of which was issued to Clarence. Clarence’s
Voya annuity had a value of approximately $350,000 and provided a benefit of
approximately $480,000 upon his death. Diamond recommended that the Lotzers

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“transfer” funds from Voya variable annuities and use those funds to purchase
fixed annuities with a company called Forethought.5 Diamond advised the Lotzers
that such a transfer made sense because the value of the Forethought annuities
would be less susceptible to losses associated with the stock market.

¶9 Before his “consultation” with the Lotzers, Diamond had never sold
a variable annuity. He had never worked with and was unfamiliar with annuities,
like the Voya ones that the Lotzers held, that have enhanced death benefits.

¶10 To clarify the terms of the Voya death benefits, Diamond called
Voya during his “consultation” with the Lotzers and spoke with a representative
on speakerphone about Clarence’s annuity. A recording of the call made by Voya
reflects that Diamond was informed by a Voya representative that “the minimum
required balance” to maintain the death benefit on that annuity was $2,500. The
representative further informed Diamond that “any withdrawal done reduces the
death benefit amount…proportionately, not dollar per dollar.”

¶11 We pause to note that, as explained by the prospectus for the Voya
annuities, the statement that a withdrawal reduces the death benefit amount
“proportionately” means that the percentage reduction in the value of the annuity
resulting from a withdrawal will result in an equal percentage reduction in the

5
As defined in exhibits in the record, an annuity is a contract between an insured and an
insurance company that is designed to meet retirement and other long-range goals, under which
the insured makes one or more purchase payments to the insurer and the insurer agrees to make
periodic payments to the insured in return. A fixed annuity sets specific terms by which the
periodic payments to the insured are calculated. With a variable annuity, the rate of return and
amount of periodic payments to the insured vary depending on the performance of the investment
options chosen by the insured.

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death benefit. Diamond did not read the Voya prospectus before recommending
or effectuating the transaction he proposed.

¶12 Resuming the facts, after this first telephone conversation with the
Voya representative, the Lotzers and Diamond completed application paperwork
directing the transfer of substantial portions of the funds from the three Voya
annuities to the purchase of three Forethought annuities. Diamond certified on the
application that the transactions were suitable for the Lotzers, writing “by only
taking a partial withdraw[al] from the current [Voya annuities] we can almost
double their death benefit.”

¶13 Sometime after the consultation ended, Helen contacted Diamond to
express concern about whether the entire Voya death benefits would be preserved
if the Lotzers transferred funds from the Voya annuities and used them to purchase
the Forethought fixed annuities. In response to Helen’s concerns about
maintaining the Voya death benefits, Diamond returned to the Lotzers’ home on
November 3, 2015, and placed a second call to Voya. No recording of the second
call was introduced as evidence at the OCI hearing. While the participants
presented different accounts of what transpired during the second call, at the call’s
conclusion Helen understood that transferring money from the Voya annuities to
the Forethought annuities would not affect the death benefits. The Lotzers moved
forward with the previously completed application paperwork for the transfers to
the Forethought annuities.

¶14 The Lotzers transferred $300,000 from Clarence’s Voya annuity and
smaller sums of money from the other two Voya annuities held by the Lotzers to
purchase Forethought annuities. In January 2016, Helen received a Voya
statement that indicated that the death benefit for Clarence’s Voya annuity was

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reduced from $479,759.40 to $65,653.23 and that the death benefits for the
remaining two Voya annuities were similarly reduced, one from $30,152.84 to
$3,294.26 and the other from $19,849.95 to $3,793.58.

¶15 Helen contacted Diamond, who drafted, on the Lotzers’ behalf and
for their signature, a letter to Voya and OCI asserting that Voya had incorrectly
represented that the full death benefits would remain intact even if the Lotzers
transferred some of the cash balances to different annuities. Diamond also made a
third call to Voya. The Voya representative indicated that Diamond must have
misunderstood or misheard information provided in previous phone calls to Voya
or that he must have been provided with incorrect information during the earlier
calls.

¶16 OCI subsequently issued a notice of hearing alleging that Diamond
violated Wisconsin statutes and regulations governing insurance intermediaries.
An evidentiary hearing took place before an administrative law judge (ALJ) with
the Division of Hearings and Appeals in June 2018. Pertinent to this appeal, the
witnesses who testified at the hearing included Helen Lotzer, Diamond, and
another insurance agent who was working with Diamond at pertinent times. The
ALJ issued a proposed decision that included findings of fact and conclusions of
law. Pertinent here, the ALJ determined that: (1) Diamond misled Wisconsin
consumers “by implication and omission in violation of WIS. STAT. § 628.34(1)(a)
and WIS. ADMIN. CODE § Ins 2.16(5)(a) by advertising a free retirement workshop
with the true purposes of inducing potential insurance customers;” and
(2) Diamond “did not have reasonable grounds to believe it was suitable for the
Lotzers to withdraw funds from their Voya [annuities] to purchase Forethought
[annuities]” in violation of WIS. STAT. §§ 628.347(2)(a) and (2)(a)(4)a.

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¶17 In November 2018, the Commissioner issued a final decision that
adopted the ALJ’s proposed decision. As pertinent to the issues raised on appeal,
the Commissioner’s decision ordered Diamond to pay a forfeiture in the amount of
$144,746.56 and to pay restitution to the Lotzers in the amount of $130,021.12.

¶18 Diamond petitioned for judicial review. In November 2019, the
circuit court issued a comprehensive decision that affirmed the Commissioner’s
decisions, except that the court reduced the forfeiture to $47,130. Diamond
appeals.

¶19 We present pertinent details of the Commissioner’s decision, the
testimony and evidence presented at the hearing, and the circuit court’s decision in
the discussion that follows.

DISCUSSION

¶20 Diamond frames his appeal based on asserted errors by the circuit
court. However, “[i]n an appeal of a circuit court order affirming or reversing an
agency decision, we review the decision of the agency, not that of the circuit
court.” Wisconsin Dep’t of Revenue v. Microsoft Corp., 2019 WI App 62, ¶13,
389 Wis. 2d 350, 936 N.W.2d 160. Accordingly, we reframe Diamond’s
arguments based on their substance, as follows: (1) the Commissioner’s
determination that the advertisement misled consumers is not supported by the
evidence and is based on a misinterpretation of WIS. STAT. § 628.34(1)(a); (2) the
Commissioner’s determination that Diamond had no reasonable grounds to believe
that the transfer of funds from the Voya annuities to the Forethought annuities was
suitable is not supported by the evidence; (3) the Commissioner improperly
imposed the forfeiture even as reduced by the circuit court; and (4) the
Commissioner erred in calculating restitution. We first summarize the standard

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governing our review of the Commissioner’s decision and then address and reject
in turn each of Diamond’s arguments.

I. STANDARD OF REVIEW

¶21 “When reviewing findings of fact made by the [Commissioner], we
will affirm the findings if those are supported by substantial evidence.” Id.

Substantial evidence does not mean a preponderance of
evidence. It means whether, after considering all the
evidence of record, reasonable minds could arrive at the
conclusion reached by the trier of fact. “[T]he weight and
credibility of the evidence are for the agency, not the
reviewing court, to determine.” An agency’s findings of
fact may be set aside only when a reasonable trier of fact
could not have reached them from all the evidence before
it, including the available inferences from that evidence.

Milwaukee Symphony Orchestra, Inc. v. DOR, 2010 WI 33, ¶31, 324 Wis. 2d 68,
781 N.W.2d 674 (footnotes and quoted source omitted).

¶22 “When reviewing questions of law decided by an agency, including
statutory interpretation, our review is de novo.” Microsoft Corp., 389 Wis. 2d
350, ¶13. This court gives due weight to “the experience, technical competence,
and specialized knowledge of the agency involved, as well as the discretionary
authority conferred upon it.” WIS. STAT. § 227.57(10); Tetra Tech EC, Inc. v.
DOR, 2018 WI 75, ¶¶71, 75-76, 382 Wis. 2d 496, 914 N.W.2d 21. “Statutory
interpretation begins with the statute’s text. We give the text its common,
ordinary and accepted meaning …. If the meaning of the statute is clear from its
plain language, we do not look beyond that language to ascertain its meaning.”
Microsoft Corp., 389 Wis. 2d 350, ¶14 (citations omitted). We apply the same
principles in interpreting regulations. Orion Flight Servs., Inc. v. Basler Flight
Serv., 2006 WI 51, ¶18, 290 Wis. 2d 421, 714 N.W.2d 130 (interpretation of

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administrative code provisions is a question of law that an appellate court reviews
de novo using principles of statutory interpretation).

II. MISLEADING ADVERTISEMENT

¶23 The Commissioner determined that Diamond’s workshop
advertisement violated WIS. STAT. § 628.34(1)(a) and WIS. ADMIN. CODE § Ins
2.16(5)(a). The statute provides in pertinent part that no licensed insurance
intermediary “may make or cause to be made any communication relating to an
insurance contract, the insurance business, any insurer, or any intermediary that
contains false or misleading information, including information that is misleading
because of incompleteness.” Sec. 628.34(1)(a). The regulation provides that
“[a]dvertisements, representations, and solicitations shall be truthful and not
misleading in fact or in implication and shall accurately describe the policy, the
insurance business, any insurer, or any intermediary to which they apply.” WIS.
ADMIN. CODE § Ins 2.16(5)(a).

¶24 The Commissioner based the specific determination that Diamond
used “misleading advertising to attract Wisconsin insurance consumers” on the
following undisputed facts. First, the advertisement identified Diamond, the
presenter of the workshop, as “Senior Education Counsel,” which was the name of
his non-profit organization, and failed to identify Diamond as an insurance agent
or make any mention of insurance products. Second, the advertisement stated that
nothing would be sold at the workshop, which was “technically” true but failed to
disclose that Diamond planned to use the workshop as a means to solicit
consultations with potential clients to whom he hoped to sell insurance products
that had been discussed at the workshop. Thus, the Commissioner determined, the
advertisement was misleading by omission and in implication

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¶25 The facts underlying the Commissioner’s determination are
supported by substantial evidence in the record, and Diamond does not argue to
the contrary. Rather, Diamond contends that the advertisement was not
misleading for the following reasons. First, he points to one dictionary definition
of “mislead” as to “deceive,” and from this derives an argument that “OCI
introduced no evidence that any attendee of any workshop was deceived” or that
any attendee “received any unwanted sales contact.” Second, he argues that
nothing in WIS. STAT. § 628.34(1)(a) and WIS. ADMIN. CODE § Ins 2.16(5)(a)
requires that an advertisement of this type state that Diamond is a licensed
insurance agent. Third, he argues that the advertisement did not “describe a
policy, the insurance business, or any insurer,” and therefore could not have done
so in an untruthful or misleading way.

¶26 As to Diamond’s first argument, evidence bearing on what attendees
in fact believed or whether any attendee received an “unwanted sales contact” was
not relevant to determining whether the advertisement was objectively misleading
by omission and implication.

¶27 As to Diamond’s second argument, the failure of the advertisement
to identify Diamond as a licensed insurance agent is “communication relating to
… [an] intermediary” that is “misleading because of incompleteness” and “by
implication,” WIS. STAT. § 628.34(1)(a) and WIS. ADMIN. CODE § Ins 2.16(5)(a),
in at least two respects. First, the advertisement identified Diamond, the presenter,
only as Senior Education Counsel, not as an insurance agent. Second, there was a
combination of other misleading elements. Diamond admitted at the hearing
before the ALJ that his discussion of Medicaid planning at the workshops required
him to discuss insurance annuity products, even though the advertisement did not
mention such products. Thus, the statement that no sales would be made at the

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workshop and the absence of any reference to the insurance products that Diamond
would describe at the workshop together constituted omissions that failed to
apprise attendees that Diamond planned to use the workshop to set up insurance
sales after the workshop.

¶28 Diamond’s third argument—that the advertisement failed to describe
a “policy, the insurance business, or any insurer”—goes nowhere because it is
beside the point. The point is that the advertisement failed to describe “an
intermediary,” WIS. STAT. § 628.34(1)(a), namely, Diamond.

¶29 In sum, Diamond fails to show that the Commissioner misapplied
the law or that substantial evidence does not support the Commissioner’s
determination that the advertisement violated WIS. STAT. § 628.34(1)(a) and WIS.
ADMIN. CODE § Ins 2.16(5)(a).

III. UNSUITABLE TRANSACTION

¶30 The Commissioner determined that Diamond did not have
reasonable grounds as required by WIS. STAT. § 628.347(2)(a) to believe that it
was suitable for the Lotzers to transfer funds from their existing annuities to
purchase the annuities Diamond was selling. That statute provides:

(a) In recommending to a consumer the purchase of
an annuity, or the exchange of an annuity that results in an
insurance transaction or series of insurance transactions, an
insurance intermediary … shall have reasonable grounds to
believe that the recommendation is suitable for the
consumer on the basis of facts disclosed by the consumer as
to his or her investments, other insurance products, and
financial situation and needs, including the consumer’s
suitability information, and that all of the following are
true:

….

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3. The … transaction as a whole is suitable, for the
particular consumer based on his or her suitability
information.

4. In the case of an exchange or replacement of
annuity, the exchange or replacement is suitable, including
taking into consideration all of the following:

a. Whether the consumer will … lose existing
benefits, such as death, living, or other contractual
benefits….

Sec. 628.347(2)(a)

¶31 We first provide additional pertinent record evidence and summarize
pertinent aspects of the Commissioner’s determination, and then address
Diamond’s arguments challenging that determination.

¶32 As stated above, in the first phone call with Voya, in which the
Lotzers participated, the Voya representative said that any withdrawal would
reduce the death benefit amount proportionately. The following exchange then
took place:

[DIAMOND]: I understand. I understand. But
$2,500 would maintain the death benefit currently. Is that
correct?

[VOYA]: Yes.

[DIAMOND]: Okay. Um, any other questions?

[CLARENCE]: No.

[HELEN]: I, I don’t quite understand that. If, if the
$350,000 is gone –

[DIAMOND]: No, no, no. No, you, you have to
maintain a certain amount of money in the account to
[inaudible] that [inaudible] and that amount is $2,500 in
order to maintain the –

[CLARENCE]: [inaudible]

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[DIAMOND]: Now if, if you have the living
benefit, which you haven’t activated, any withdrawal
would reduce that living benefit. But you haven’t activated
that yet, so, no, no, I, I know exactly what the product is; I
just want to make sure that you know what it is. Okay?

¶33 Helen testified that, after the first call, “it seemed like … we could
have both …. Taking money out and still having the death benefit there.” She
testified that she became nervous the more she thought about it and that she called
Diamond to express her concern about losing the death benefit. She testified that
she did not speak during the unrecorded, second call that Diamond made to Voya,
that only Diamond spoke to Voya, and that “apparently, it must have sounded
okay to me because we … moved forward.”

¶34 Diamond testified that the Voya representative clarified during the
second call that leaving $2,500 in the Voya annuity would maintain “the death
benefit of that $477,000.” He testified that Helen “took control of the
conversation” and asked “‘Now, let me get this straight, if we just leave $2,500 in
the account, would that make—and my husband dies the next day—will I be paid
470-some thousand dollars?’” to which the Voya representative answered,
“‘Yes.’” The insurance agent who was working with Diamond at the time and
was present for the second call similarly testified that Helen asked this question
and received this answer during the call.

¶35 Diamond testified that he had never sold variable annuities before
his interactions with Lotzers and was unfamiliar with annuities that, like the Voya
annuities, had enhanced death benefits. Diamond testified that the transaction was
intended to give the Lotzers $842,561.00 in total death benefits but that the
transaction “fell short” and “did not work as intended.” He also testified that,
other than the death benefit issue, there is no indication that the product he sold

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them was unsuitable. The insurance agent who was working with Diamond at the
time testified that he and Diamond did not review the Voya prospectus to confirm
that the $2,500 balance would pay a death benefit of more than $400,000.

¶36 The Commissioner relied on the following undisputed facts to
determine that Diamond lacked reasonable grounds to believe that his
recommendation to transfer funds from the Voya annuities to purchase the
Forethought annuities was suitable for the Lotzers. As the Commissioner put it,
these facts showed that the transaction was “too good to be true.” First, Diamond
admitted that he was unfamiliar with variable annuities and those that, like the
Voya annuities, provided enhanced death benefits; therefore, Diamond “could not
possibly” have determined whether the Forethought annuities were suitable
“because he did not understand whether the Lotzers would lose existing benefits.”
Second, in the first phone call with Voya, Diamond focused on the statement that
the minimum required balance on Clarence’s annuity was $2,500 but ignored the
follow-up statement that any withdrawals would reduce the death benefit amount
proportionately. When Helen sought clarification, Diamond “shut her down and
assured her—incorrectly—that he knew ‘exactly’ what the Voya product was.”
Third, immediately after the first call, Diamond signed Clarence’s application for
the Forethought annuity and certified that it was a suitable product because “by
only taking a partial withdrawal from the current policy we can almost double
their death benefit”; in explaining the transaction to Forethought, Diamond
asserted that the death benefits would increase from $515,561 to $842,561, when
in fact the death benefits from the existing Voya annuities decreased from
$529,762.19 to $72,741.07.

¶37 As stated, Diamond does not dispute the Commissioner’s finding
that “the Lotzers lost the vast majority of the death benefits they had accumulated

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with Voya.” Diamond also does not dispute the Commissioner’s finding that
Diamond was unfamiliar with and did not understand annuities like the Voya
annuities and, therefore, “could not possibly” have been able to assess the
suitability of transferring money from them to a different kind of annuity. The
Commissioner found that “[w]ithout understanding the policies [Diamond] was
recommending his customers replace, he could not possibly have had reasonable
grounds” to determine whether his recommendation was suitable. As the
Commissioner notes, that Diamond incorrectly certified the transfer’s suitability
because it would “almost double [the Lotzers’] death benefit” confirms Diamond’s
inability to reasonably assess his proposal’s suitability.

¶38 Diamond argues that the Commissioner’s determination disregards
certain other evidence: (1) that Diamond certified the transaction as suitable based
on assurances from Voya that the transaction would not reduce the Lotzers’ death
benefits, and (2) that the transaction was suitable because it increased the Lotzers’
wealth. We address each argument in turn.

¶39 First, Diamond argues that the Commissioner’s determination of
nonsuitability disregards evidence showing that Diamond relied on “serial
misrepresentations” by Voya regarding the effect of the proposed transaction on
the Voya death benefits and that he waited to make a final suitability
determination until he received “absolute assurances” from Voya during the
second phone call. However, substantial evidence supports the Commissioner’s
findings to the contrary.

¶40 The Commissioner found the following. The information provided
by Voya during the first, recorded call was sufficiently clear to “put [Diamond] on
notice” that any withdrawals would reduce the death benefits proportionately.

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Diamond affirmatively deflected attempts at clarification and insisted that he knew
“exactly” how the Voya annuity worked, even though he had not read the Voya
prospectus. The substance of the second call, while disputed, was irrelevant
because the call occurred after Diamond completed and signed the Forethought
application paperwork and certified the suitability of the transaction.

¶41 Diamond argues that the transcript of the first call shows that the
Voya representative misled him and argues that the fact that he made a second call
shows that he had not yet made “a final suitability determination.” Diamond
merely offers a favorable inference from the evidence, which is unavailing
because substantial evidence supports the unfavorable inferences reasonably
accepted by the Commissioner. See Ellis v. DOA, 2011 WI App 67, ¶31 n.7, 333
Wis. 2d 228, 800 N.W.2d 6 (“where two conflicting views may each be sustained
by substantial evidence … it is for the agency to determine which view of the
evidence it wishes to accept”) (citation and internal quotation marks omitted);
Hilton ex rel. Pages Homeowners’ Ass’n v. Department of Nat. Res., 2006 WI
84, ¶25, 293 Wis. 2d 1, 717 N.W.2d 166 (“The agency’s decision may be set aside
by a reviewing court only when, upon an examination of the entire record, the
evidence, including the inferences therefrom, is such that a reasonable person,
acting reasonably, could not have reached the decision from the evidence and its
inferences.”) (citation and internal quotation marks omitted).

¶42 Second, Diamond asserts, without citing record evidence, that the
Commissioner’s unsuitability decision disregards evidence that the transaction was
suitable for the Lotzers because the Forethought annuities were superior to the

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Voya annuities and “made them … considerable money.”6 However, this
assertion disregards the above-summarized evidence that Diamond, when he
certified the transaction as suitable, did not know enough about the Voya annuities
to reliably compare them to the Forethought annuities or to evaluate whether
transferring significant sums of money from them was suitable for the Lotzers.
Thus, Diamond’s unsupported assertion is not a basis to disturb our conclusion
that substantial evidence supports the Commissioner’s determination that
Diamond violated the law by recommending insurance transactions without
reasonable grounds to believe they were suitable.

¶43 Finally, and separately from his challenge to the Commissioner’s
factual findings, Diamond appears to argue that to affirm the Commissioner’s
determination regarding the suitability violation would require “excessive”
deference to the Commissioner. This assertion fails for the following reasons.
First, as discussed above, our conclusion that the Commissioner’s decision is
supported by substantial evidence involves no deference to the Commissioner on
any legal question. Second, Diamond does not explain in what way analysis of the
suitability violation implicates any deference to the Commissioner on any legal
question. We decline to consider it further. See State v. Pettit, 171 Wis. 2d 627,
646, 492 N.W.2d 633 (Ct. App. 1992) (“We may decline to review issues

6
The Commissioner correctly notes that Diamond asserts as a fact that the Forethought
annuities made the Lotzers money, but Diamond provides no citation to the record in support of
that assertion. We generally do not consider arguments unsupported by references to the record.
See State v. McMorris, 2007 WI App 231, ¶30, 306 Wis. 2d 79, 742 N.W.2d 322 (court of
appeals may “choose not to consider … arguments that lack proper citations to the record.”);
Jensen v. McPherson, 2004 WI App 145, ¶6 n.4, 275 Wis. 2d 604, 685 N.W.2d 603 (“It is not
this court’s responsibility to sift and glean the record in extenso to find facts supporting [the
party’s] argument.”). However, we briefly explain in the text why we reject this argument on its
merits.

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inadequately briefed.”). Third, Diamond conceded in oral argument to the circuit
court that deference is owed the Commissioner on technical matters of insurance,
including suitability and the differences between fixed and variable annuities.

¶44 In sum, we conclude that substantial evidence in the record supports
the Commissioner’s determination that Diamond violated the law by
recommending insurance transactions without reasonable grounds to believe they
were suitable.

IV. FORFEITURE

¶45 As we will explain in greater detail below, the circuit court reduced
the forfeiture imposed by the Commissioner for the misleading advertisement
violation. On appeal, Diamond challenges the Commissioner’s calculation of the
forfeiture, even as reduced by the court.

¶46 The Commissioner imposed the forfeiture pursuant to WIS. STAT.
§ 601.64(3)(a), which reads: “Restitutionary forfeiture. Whoever violates … any
insurance statute or rule … shall forfeit to the state twice the amount of profit
gained from the violation, in addition to any other forfeiture or penalty imposed.”
We first summarize the Commissioner’s forfeiture determination and the circuit
court’s reduction of the amount imposed and then explain why Diamond’s
challenge to the reduced amount fails.

¶47 The Commissioner found that Diamond sold annuity contracts to six
customers whom “he obtained through the workshops” that were promoted by the
misleading advertisement. He earned a total of $72,373.27 in commissions from
these sales. The Commissioner determined that the profit that Diamond gained
from his misleading advertisement violation was that total amount of commissions

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because those were commissions that Diamond earned from Wisconsin customers
“he would not have had but for the unlawful advertisement.” The Commissioner
thus doubled that amount pursuant to WIS. STAT. § 601.64(3)(a) and imposed a
forfeiture of $144,746.56.

¶48 The circuit court reduced the forfeiture because the statute requires a
causal connection between the misleading advertisement violation and the profit
used to calculate the forfeiture, see WIS. STAT. § 601.64(3)(a) (“Whoever violates
… any insurance state or rule … shall forfeit to the state twice the amount of any
profit gained from the violation.”) (emphasis added). It determined that Helen’s
testimony established the causal connection between the misleading advertisement
and her attendance at the seminar and her “dealing[s] with Diamond,” but that
there was no evidence in the record regarding why the Wisconsin customers other
than the Lotzers attended the workshops or purchased annuities from Diamond.
Accordingly, the circuit court determined that the profit Diamond gained from the
misleading advertisement was limited to the commissions he earned from the
Lotzer transactions, which were undisputed to be $23,565 and thus yielded a
forfeiture of $47,130.7

¶49 Diamond challenges the Commissioner’s imposition of the
forfeiture, as reduced by the circuit court, on three grounds. First, Diamond
quotes an irrelevant statutory provision, which does not mention profit but instead
provides that “whoever violates an order issued under s. 601.41(4) … shall forfeit
to the state not more than $1,000 for each violation.” WIS. STAT. § 601.64(3)(b).

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We do not weigh in on the circuit court’s decision to reduce the restitution award
because OCI has not cross appealed this decision.

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No. 2020AP99

¶50 Second, Diamond argues that there is no causal connection between
the advertisement and the Lotzer transaction, for two reasons. The first reason he
offers is that it is undisputed that the Lotzers knew he was an insurance agent “at
all relevant points throughout the purchase process.” However, Diamond provides
no record citations to support this argument, which is a sufficient basis to reject his
argument. Further, he does not explain how what the Lotzers knew during “the
purchase process” establishes what they knew when they decided to attend the
seminar or when they asked for a “consultation” after the seminar, all before “the
purchase process.” Accordingly, we reject this argument as undeveloped. See
State v. McMorris, 2007 WI App 231, ¶30, 306 Wis. 2d 79, 742 N.W.2d 322 (“we
may choose not to consider … arguments that lack proper citations to the record”);
Pettit, 171 Wis. 2d at 646. The second reason he offers is that, even if the Lotzers
would not have attended the workshop had they known he was an insurance agent
who planned to use the workshop to make insurance sales to attendees after the
workshop, any causal connection “between the advertisement and the transaction
is too attenuated to support” a forfeiture. Diamond does not explain his “too
attenuated” concept or provide any evidentiary support for it, and we reject it on
that basis. To the extent that Diamond means to reiterate his arguments for why
the advertisement was not misleading, we have addressed and rejected those
arguments above.

¶51 Third, Diamond argues that the Commissioner improperly calculated
“profit” by failing to deduct the expenses of hosting the workshop from his
commissions, citing a dictionary definition of “profit” as “excess of revenues over
expenditures.” However, Diamond points to no evidence in the record that he
incurred any such expenses. He testified that his non-profit organization Senior
Education Counsel presented the workshops, and that “it neither takes money in

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No. 2020AP99

nor pays money out.” He testified that Retirement Planning Services, Inc., owned
and operated by his wife, paid the costs of the seminars and paid Diamond a
speaker fee, and that Forethought paid him the commissions that resulted from the
sale of insurance products. He contends that as part of OCI’s burden to prove
profit it was OCI’s burden to present evidence of and deduct the expenses he paid.
This argument is specious; as OCI responds, only Diamond would know what
those expenses were, and he failed to present evidence of expenses.

¶52 In sum, Diamond fails to show that the Commissioner improperly
imposed a forfeiture in the amount to which the circuit court reduced it.

V. RESTITUTION

¶53 The Commissioner awarded restitution pursuant to WIS. STAT.
§ 601.41(4)(a), which authorizes the Commissioner to issue “orders as are
necessary to secure compliance with the law.” Diamond does not challenge the
Commissioner’s determination that restitution was warranted here “to secure
compliance with the law.” Rather, Diamond challenges only the Commissioner’s
calculation of the amount of restitution as unsupported by evidence. We first
summarize the Commissioner’s calculation and then explain why we conclude that
Diamond fails to show that the calculation was not supported by substantial
evidence.

¶54 The purpose of restitution is to return victims to the position they
occupied before they were injured. State v. Holmgren, 229 Wis. 2d 358, 366, 599
N.W.2d 876 (Ct. App. 1999). Here, the Commissioner stated that OCI sought
restitution in an amount that would restore the Lotzers “to the position they would
have occupied but for the unsuitable transaction.” The Commissioner reasoned
that such an amount was “most fairly determined by reference to the date of the

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No. 2020AP99

ill-advised transactions.” To that end, the Commissioner calculated that the Voya
death benefits were reduced from $529,762.19 to $72,741.07, for a loss of
$457,021.12 as of the date of the transaction. The Commissioner then subtracted
from that loss the guaranteed cash values of the Forethought annuities that the
Lotzers gained, $327,000, to arrive at a “net loss of $130,021.12” and ordered that
Diamond pay that amount as restitution.

¶55 Diamond does not argue that any of the amounts referenced by the
Commissioner are unsupported by evidence in the record. Rather, Diamond
challenges the date that the Commissioner used to arrive at those amounts as
unsupported by the evidence. Specifically, Diamond argues that it was “plainly
erroneous” for the Commissioner to base the calculation of restitution on the Voya
death benefits and on the value of the Forethought annuities as if Clarence had
died on the day of the transactions, because by doing so the Commissioner
(1) overstated the lost death benefits of the Voya annuities, and (2) understated the
gained value of the Forethought annuities. As we explain, Diamond’s argument
fails in several respects.

¶56 In support of his first point, Diamond asserts that, because the Voya
death benefits were contingent on Clarence’s death, which had not yet happened,
the Commissioner did not have a basis in the evidence to determine that the
Lotzers lost money as of the date of the transaction. Implicit in this assertion is
the proposition that contingent death benefits were declining in value and would
have lower value on the future date of Clarence’s death than on the date of the
transactions. Whatever the theoretical merits of this proposition, Diamond does
not explain how or to what extent the death benefits here would have decreased
over time, or what alternative method the Commissioner should have used given
this dynamic. Nor does he offer a different calculation of what it would take to

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No. 2020AP99

restore the Lotzers to the position they were in before the unlawfully
recommended transactions. See Holmgren, 229 Wis. 2d at 366 (purpose of
restitution is to put victims in same position as before they were injured); Office of
Law. Regul. v. Edgar, 2003 WI 49, ¶11, 261 Wis. 2d 413, 661 N.W.2d 817
(awarding restitution specified by the Office of Lawyer Regulation in light of
attorney’s failure to offer and support alternative amounts). We conclude that
Diamond fails to show that the Commissioner’s calculation of the death benefits
was not based on substantial evidence of the value of those benefits on the date of
the transaction.

¶57 In support of his second argument, Diamond asserts that the
Commissioner undervalued the Forethought annuities because those annuities
would increase in value every year that Clarence remained alive, thereby reducing
the Lotzers’ loss. Implicit in this assertion is the proposition that the Forethought
annuities would be more valuable at the future date of Clarence’s death than on the
date of the transactions. Again, however, even if the theoretical proposition could
have merit, Diamond fails to present a fully developed argument attempting to
explain why the Commissioner’s approach here was improper until his reply brief.
Further, even in the reply brief, the details he offers provide too little support and
come too late. See A.O. Smith Corp. v. Allstate Ins. Cos., 222 Wis. 2d 475, 492,
588 N.W.2d 285 (Ct. App. 1998) (this court generally does not address arguments
developed for the first time in a reply brief). And even then, he fails to offer a
“correct” number based on the evidence in the record. As with his first argument,
we conclude that he fails to show that the Commissioner’s calculation of the value
of the Forethought annuities is not supported by substantial evidence.

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No. 2020AP99

CONCLUSION

¶58 For the reasons stated, we affirm.

By the Court.—Order affirmed.

Not recommended for publication in the official reports.

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