Former Morgan Stanley rep fined for concealing athlete management business

Finra fines Ken Kavanagh $25,000 and suspends him for 18 months over outside activities

Aug 6, 2019 @ 2:08 pm

By InvestmentNews

The Financial Industry Regulatory Authority Inc. has fined former Morgan Stanley broker Ken Kavanagh $25,000 and suspended him for 18 months for running a business managing the personal affairs of professional athletes and concealing the business from his employer.

(More: What advisers need to know to serve professional athletes)

Mr. Kavanagh, who resigned from Morgan Stanley in April 2018 after 16 years with the firm and a predecessor, is not currently employed in the securities business.

From 2007 to 2018, Mr. Kavanagh engaged in outside business activities without providing prior written notice to Morgan Stanley, which was a violation on Finra's rules, according to the regulator's letter of acceptance, waiver and consent.

Specifically, he managed the personal affairs of more than 40 professional athletes who were both his and the firm's clients, and received approximately $5 million in fees, according to Finra. Kavanagh also falsely attested on six firm questionnaires that he was not involved with any outside business activities, Finra stated.

The management services provided by Mr. Kavanagh included coordinating transportation and housing, making dinner and travel arrangements, recommending individuals to prepare wills and tax returns, and coordinating payment for items such as clothing, automobiles, insurance, and other personal expenses, Finra noted.


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