The U.S. Securities and Exchange Commission obtained a temporary restraining order against Honolulu financial adviser Mark K. Teruya after alleging he exploited some of his elderly clients.

Judge Helen Gillmor agreed to the order and set an Oct. 17 hearing for a preliminary injunction sought by the SEC against Teruya. The ruling came after Teruya's attorney Mark Kawata disputed the agency's claims of fraud and said that none of Teruya's clients had lost money.

"We don't believe the evidence before the court shows a pattern of fraud," Kawata said. "This agency has done what it can to finish Mr. Teruya off in this town."

Teruya's dispute with the SEC and Hawai'i state regulators spilled into the public last week when authorities announced they had worked together in an investigation of Teruya's Senior Resources of Hawaii Inc., a firm that does business as USA Wealth Resources. On Sept. 7 the SEC filed a lawsuit against the adviser alleging he misled clients into signing blank forms without disclosing their purpose.

It also claimed Teruya used the documents to liquidate other accounts held by the clients and use the proceeds to purchase equity indexed annuities that paid commissions of 12 percent to 14 percent. The lawsuit also asks for restitution and civil penalties.

SEC attorney Sam Puathasnanon noted the state has fielded two dozen calls either inquiring or with complaints about Teruya since news broke about the lawsuit and state action.

The state Securities Enforcement Branch also issued a preliminary order and asked Teruya to cease and desist with his activities.

A few days later the state Insurance Commissioner's office suspended Teruya's insurance license and said it was seeking a permanent revocation.

Kawata said he is challenging the state's assertions though administrative hearings and that he filed a lawsuit against the Insurance Division yesterday saying it improperly suspended Teruya's license.

He said the division had no standing to do so and will seek reinstatement of the license in a state Circuit Court hearing Thursday.

"It's really turned into a witch hunt," Kawata said in court yesterday. He said Teruya has many satisfied clients who are remaining with him.

Gillmor didn't agree with Kawata's arguments, saying she was granting the restraining order because there was enough information before the court that said there is a risk that needs to be examined.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.