Finra has fined and suspended an ex-Osaic advisor after finding he violated the industry regulator's rules by failing to disclose a million-dollar bequest from a client.
Kenneth John Malm, a former general securities representative in New York, has agreed to a suspension and a fine after the Financial Industry Regulatory Authority found he accepted a more than $1 million bequest from a client without notifying his firm.
Malm had been registered with Finra since 1994 and was associated with Securities America from July 2020 until June 2024. Following a mass transfer, he became affiliated Osaic Wealth, where he remained until August 2024.
His BrokerCheck profile shows his career in the industry spanned three decades, including a past affiliation with UBS Painewebber from 1998 until 2002.
He faced two customer disputes, including one former UBS client claiming in 2003 that Malm "breached his fiduciary duties by misrepresenting the risks and nature of unsuitable investments" he made. The client claimed roughly $186,000 in damages, but ultimately received just under $50,000 as a settlement.
Finra's latest disciplinary action stems from Malm’s conduct following the death of a client in August 2021, which came to light via a tip to the Finra Securities Helpline for Seniors.
According to the settlement dated May 20, Malm learned after her passing that he had been named as a beneficiary in her estate. The client was not a member of his immediate family.
Despite that, Malm failed to inform or seek approval to receive the inheritance from his then-employer, Securities America – which was later absorbed into Osaic as part of a broader consolidation strategy – as required by Finra Rule 3241.
The rule prohibits representatives from receiving bequests from clients who are not family members unless they provide prior written notice and obtain firm approval following a reasonable assessment.
Finra determined that Malm’s actions also violated Rule 2010, which requires members to observe “high standards of commercial honor and just and equitable principles of trade.”
Osaic reported that Malm was permitted to resign amid an internal review “concerning his being named as beneficiary of a client’s estate."
He has agreed to a seven-month suspension from associating with any Finra member firm, as well as a $10,000 fine.
In an era of AI euphoria and market FOMO, getting back to basics with fixed income may be the most contrarian and most important move advisors can make.
Voya Financial adds private equity, credit and real estate options to its AMA program, building on support for looser federal investment rules in retirement accounts.
Shannon Reid, president of Osaic and the network’s number two executive, has plenty of challenges, industry executives said.
Auditors flagged the commingling. The COO allegedly knew. Investors kept getting the pitch
The advisors on the move include two brothers leading a family practice in Connecticut, and a husband-and-wife tandem working with business owners in the West Coast.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
