Add barred broker Chris Kennedy to the list of legacy financial advisors at the recently acquired Western International Securities that have been the target of securities regulators this year.
Kennedy’s $2.1 million settlement earlier this week with the Securities and Exchange Commission for alleged high volume trading, known as churning in securities industry parlance, caps a year when other former Western International Securities financial advisors also got into trouble with regulators.
Western International Securities, which has had high-profile compliance issues in the past, was one of the firms LPL Financial Holdings acquired this year in its purchase of the Atria Wealth Solutions Inc. network of broker-dealers.
Kennedy and the SEC reached their settlement on Tuesday. The agency alleged that he made false and misleading statements to his customers regarding the value and success of his trading strategy.
The SEC further alleged that Kennedy's fraudulent conduct included sending one customer falsified account statements that grossly overstated the value of their account.
Over the summer, Western International Securities signed off on regulatory matters that totaled close to $1.7 million in penalties. In one of those cases, the SEC reached a settlement with Western International Securities stemming from Regulation Best Interest charges in the sale of bonds issued by GWG Holdings, which filed for bankruptcy in April 2022.
“Those cases involve retired clients who needed a return of 8 percent to live and buy medicine,” said one senior industry executive who spoke confidentially to InvestmentNews about Western International Securities. “The important thing for the clients was to get that dividend.”
Also over the summer, Finra barred a broker who had been “misappropriating” – meaning taking – client funds for 17 years and was fired from Western International Securities in June.
The Financial Industry Regulatory Authority Inc. barred Kennedy from the securities industry last year, according to his BrokerCheck report.
Kennedy, who was registered with Western International Securities from 2019 to 2021, could not be reached on Friday to comment about the settlement and penalty that the SEC announced earlier this week. He worked at five different firms in an 18-year career in the securities business that began in 2002.
The SEC’s complaint also charged that, between July 2020 and July 2021, Kennedy also violated Regulation Best Interest by recommending a short-term, high-volume investment strategy in 19 brokerage retail customer accounts without a reasonable basis for doing so.
The SEC alleged that Kennedy's recommendations resulted in more than $363 million in total transactions spread through the 19 accounts, ultimately resulting in over $9 million in customer losses.
12 firms agreed to pay the fines to settle charges.
SEC says 10 separate provisions of the law were violated by two firms.
It marks the California based advisory network's 11th deal in 15 months.
FP Alpha and Morningstar provide fresh options to boost productivity.
Potentially avoiding sudden shocks boosts foreign currencies.
AssetMark Group CEO explains why the great wealth transfer, succession planning, and personalization will be key for advisors in the new year.
A trust delivery model not only increases the value of an advisor and a firm but is also a natural addition to any firm’s succession plan.
