Former Morgan Stanley rep fined for concealing athlete management business

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 06, 2019

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.

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.