Banned broker continued advising clients: Regulator

Permanently barred by Finra in 2008, adviser signed up clients anyway, Ohio claims; citizens group wants him out as town treasurer
APR 29, 2010
The Ohio Division of Securities has issued a notice that it intends to file a cease-and-desist order against a banned broker who allegedly continued to act as an investment adviser. According to the June 16 notification, Kevin O'Brien has been operating his own investment advisory firm — O'Brien Private Wealth Management LLC — despite being permanently barred from working in the securities industry nearly three years ago by the Financial Industry Regulatory Authority Inc. and not being registered in Ohio as an investment adviser. Finra claimed that Mr. O'Brien, a former registered representative with Robert W. Baird & Co. Inc., stole more than $300,000 from a client while employed at Baird. Mr. O'Brien consented to the ban without admitting or denying Finra's findings. The client, Ross Brooks, was talking to police about filing criminal charges against Mr. O'Brien, according to Michael Houston, a detective with the Norwood police department in Cincinnati. Mr. Brooks committed suicide last July. The rep also lost his investment adviser license after being terminated by Baird. The day that Mr. O'Brien's securities license was terminated by Finra — Sept. 17, 2008 — O'Brien Private Wealth filed an application with the state of Ohio for an investment adviser firm license. The application stated that the firm's operations would include “financial planning services, portfolio management for individuals and businesses, and pension consulting services,” according to the state. In December 2008, the firm and Mr. O'Brien withdrew applications for investment adviser status, according to the notice. Despite that, Ohio securities regulators claim that Mr. O'Brien reached out to former Baird customers from September 2008 through February 2010, ultimately signing up 15 clients. In addition, from September 2008 through Dec. 31, 2009, Mr. O'Brien filed 21 power-of-attorney forms with Charles Schwab Bank on behalf of his clients there, giving Mr. O'Brien the ability to access clients' bank account and trade information, according to regulators. But Mr. O'Brien defended his actions, stating that he was merely providing financial education information, such as budgeting and personal finance advice. Mr. O'Brien claims he never provided investment advisory services after Sept. 2008. "I've never provided investment advice in violation of state or federal laws," he said. But the state claims two of his clients, husband and wife William C. Lewis and Dorothy Lewis, paid Mr. O'Brien $800 for investment advice. The complaint states that Mr. O'Brien never informed the couple that he had been terminated by Baird or that he was not licensed to give investment advice in Ohio. Mr. O'Brien has created a stir in the Cincinnati area. In November 2009, he was elected to a four-year term as an Anderson Township trustee. In this position, he and two other trustees manage the town finances and oversee its fire and police departments, plus payments for its roadways. After learning that Mr. O'Brien had been barred from the securities industry, a group of Anderson Township citizens petitioned the courts to post a higher bond to cover his role as trustee. Mr. O'Brien had posted a $1,000 bond using his own underwriter and paying for it with his own money. In March 2010, the citizens won their petition when Mr. O'Brien agreed to a $25,000 bond — far above the standard $10,000 bond that the other trustees hold. “Given the allegations in this very comprehensive report, it's even more imperative than ever that trustee O'Brien resign,” said Courtney A. Laginess, an attorney who represented the Anderson Township citizens over the higher bond coverage. “It should raise the public's suspicion.” Meanwhile, Mr. O'Brien has 30 calendar days to respond to the notice, said Dennis Ginty, a spokesman for the Ohio Department of Commerce. Dennis Concilla, an attorney with Carlile Patchen & Murphy LLP, who is representing Mr. O'Brien, said "we are working with the state of Ohio and we are confident that we will get a resolution."

Latest News

SEC Says Game Service Roblox Part of ‘Active Investigation’
SEC Says Game Service Roblox Part of ‘Active Investigation’

Short sellers previously said the company was under investigation, though Roblox denied allegations.

Musk’s DOGE descends on CFPB with intention to shut it down
Musk’s DOGE descends on CFPB with intention to shut it down

The Consumer Financial Protection Bureau is in the crosshairs of the Republican group that is widely attempting to dismantle government agencies.

Advisor fighting Finra banishment loses $17.7 million dispute with old firm
Advisor fighting Finra banishment loses $17.7 million dispute with old firm

National Securities Corp. sued the advisor in 2020, alleging breach of contract and unjust enrichment.

Job numbers, inflation leaving room for Fed to hold rates
Job numbers, inflation leaving room for Fed to hold rates

Recent data support a measured pace by the Federal Reserve for the year ahead.

Private assets remain hot despite surging stock market
Private assets remain hot despite surging stock market

Financial advisors are still adding alternatives despite the surge in publicly traded stock prices

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.