Allegations of Securities Act Violations Pending Against McNally Financial Services Corp. Financial Advisor Mark Kemp
Mark Kemp (CRD#: 2057200) is a dually registered Broker and Investment Advisor at McNally Financial Services Corporation in Corpus Christi, TX. He entered the securities industry in 1990 and previously worked for Next Financial Group, Inc.; Hornor, Townsend & Kent, Inc; The Mutual Life Insurance Company of New York; and Mony Securities Corp.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in July 2021, a customer dispute was filed against Mark Kemp. The allegation states, “Violation of equitable principles of trade and fair dealing, violation of Securities Act of 1933, Violation of Securities Exchange Act of 1934, Violation of Texas Securities Act, Common Law Fraud, Fraud in the Inducement, Fraud under Section 27.01 of the Texas Business and Commerce Code, Negligent Misrepresentation, Breach of Fiduciary duty, Breach of Contract, and Participatory and Vicarious Liability.” Damages of $370,006.75 are requested. The customer dispute remains pending.
In addition, Mark Kemp has been the subject of ten customer complaints, including two that remain pending, including the following:
● May 2021–”Violation of Common Law Fraud, Fraudulent Concealment, Violation of Common Negligent Misrepresentation, Breach of Fiduciary Duty and Negligence.” Damages of $100,000 are requested. The customer dispute is pending.
● February 2019–”Violation of Common Law Fraud, and Violation of Common Negligent Misrepresentation.” Damages of $100,000 are requested. The customer dispute is pending.
● November 2017–”violation of common law fraud, violation of negligent misrepresentation, breach of fiduciary duty and negligence.” The customer dispute was settled for $9,950.
● April 2012–”FINRA RULE 2010, NASD RULE 3110: IN NOVEMBER 2009, KEMP MISMARKED SEVEN ORDER TICKETS FOR A PENNY STOCK AS UNSOLICITED WHEN, IN FACT, THEY WERE SOLICITED, THEREBY CAUSING HIS MEMBER FIRM’S BOOKS AND RECORDS TO BE INACCURATE IN VIOLATION OF RULE 17A-3 OF THE SECURITIES AND EXCHANGE ACT OF 1934.” Mark Kemp was sanctioned by FINRA, suspending him from any capacity for five business days, beginning on May 7, 2012 and ending on May 11, 2012, and leaving a civil and administrative penalty/fine of $5,000. For a copy of the FINRA sanction, click here.
● November 2009–”SOLICITATION OF PENNY STOCK IN VIOLATION OF FIRM POLICY AND FAILURE TO OBSERVE HIGH STANDARDS OF COMMERCIAL ORDER AND EQUITABLE PRINCIPAL TRADE.” Mark Kemp was discharged by Next Financial Group, Inc.
● September 2009–”CLIENTS ALLEGE THAT THE REGISTERED REPRESENTATIVE ENGAGED IN UNAUTHORIZED TRADING AND RECOMMENDED UNSUITABLE SECURITIES AND ANNUITY INVESTMENTS, INCONSISTENT WITH THEIR FINANCIAL SITUATION, RISK TOLERANCES AND INVESTMENT OBJECTIVES.” The customer dispute was settled for $43,000.
● June 2009–”CLAIMANTS ALLEGE THAT THE REGISTERED REPRESENTATIVE MISLED THEM ABOUT SUITABLE STRATEGIES AND INVESTMENTS, ENGAGED IN UNAUTHORIZED TRANSACTIONS, REFUSED THEIR DIRECTIONS, AND RECOMMENDED WHOLLY UNSUITABLE SECURITIES AND ANNUITIES.” The customer dispute was settled for $145,000.
● March 2009–”THE CLIENT ALLEGES THAT ON 2/20/09 THE REPRESENTATIVE PLACED A TRADE IN THE CLIENT’S VARIABLE ANNUITY WITHOUT AUTHORIZATION WHICH RESULTED IN A LOSS OF $13,455.” The customer dispute was settled for $13,455.
● September 2000–”ALLEGED FALSE REPRESENTATIONS/ FRAUD REGARDING THE SALE OF SECURITIES OF WORLD HOME INDUSTRIES.” The customer dispute was settled for $1.1 millions.
● December 1999–”ALLEGED FALSE REPRESENTATIONS/ FRAUD REGARDING THE SALE OF SECURITIES OF WORLD HOME INDUSTRIES. NO ALLEGED COMPENSATORY DAMAGES.” The customer dispute was settled for $1.1 million.
● July 1999–”FALSE REPRESENTATIONS/FRAUD REGARDING THE SALE BY MARK KEMP ET, AL OF SECURITIES OF WORLD HOME INDUSTRIES.” The customer dispute was settled for $345,000.
● November 1998–”N/A MONY ALLEGES THAT I HAVE PARTICIPATED IN THE SELLING OF PRIVATE SECURITIES OR “SELLING AWAY”.” Mark Kemp was discharged from Mony Securities Corp.
● October 1998–”I WAS NEVER SHOWN ANY COMPLAINT IN WRITING, HOWEVER, I WAS TOLD THAT CUSTOMER IS ALLEGING THAT I SOLD OR RECOMMENDED THAT HE BUY STOCK IN AN UNREGISTERED PRIVATE COMPANY. THE DOCTOR WANTED MUTUAL OF NEW YORK TO BUY OUT HIS $40,000 POSITION.” Damages of $25,000 were requested. The customer complaint was closed with no action.
For a copy of Mark Kemp’s FINRA BrokerCheck, click here.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s agee, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at email@example.com.