Broker, Kimberley Schkade-Hill, Supsended by FINRA For Four Months And Fined $10,000 For Allegedly Having Clients Sign Documents In Blank
Kimberley Schkade-Hill (CRD # 4550820) is a Financial Advisor Lion Street Financial, LLC in Austin, TX. Kimberley Schkade-Hill has been in the securities industry since 2002 and previously worked at Sagepoint Financial, Inc. (1/2018-5/2018), BBVA Securitites (5/2013-1/2018), BBVA Compasss Investment Solutions, Inc. (2/2010-5/2013), and Guranty Brokerage Serivices, Inc. (7/2002-12/2009).
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on September 3, 2020, Kimberley Schkade-Hill was suspended for four months and fined $10,000 for allegedly having customers sign account documents in blank.
According to the sanction “Without admitting or denying the findings, Schkade-Hill consented to the sanctions and to the entry of findings that she caused customers to sign blank or incomplete account forms intended to process account openings and transfers, which were later filled in by a member firm registered sales assistant. The findings stated that Schkade-Hill associated with the firm and, upon her association, the firm began transitioning her customers’ accounts from her prior firm. In order to facilitate these account transfers, Schkade-Hill met with clients to obtain relevant information, but rather than filling in that information on account forms, she recorded information for each client on one or more customer profile documents. During these client meetings, Schkade-Hill asked her clients to sign blank account forms, which she would sign while blank as well. After Schkade-Hill met with the customers, a registered sales assistant at the firm would enter all of the information from the profiles into the firm’s electronic record system, and used the data to fill in the blanks on the pre-signed account forms. Schkade-Hill did not review the completed documents nor did she provide them to her customers to review. Schkade-Hill’s practice of asking her customers to sign blank forms also caused the firm to maintain inaccurate books and records. The findings also stated that Schkade-Hill mismarked customer orders as unsolicited when they were, in fact, solicited. Specifically, in instances where a customer sought to invest new or additional funds, Schkade-Hill would mark orders as unsolicited if she recommended that the customer invest those new or additional funds into securities that they already held in their accounts. By mismarking the transactions, Schkade-Hill also caused the firm to make and maintain inaccurate books and records.”
For a copy of Kimberley Schkade-Hill’s FINRA disciplinary action details click here
In addition to the FINRA sanction Kimberley Schkade-Hill has been the subject of two costumer complaint disclosures alleging sales practice misconduct:
• August 2015—”CUSTOMER PURCHASED FIXED INDEXED ANNUITY IN JULY, 2014. CUSTOMER ALLEGES THAT REPRESENTATIVE PROVIDED MISLEADING AND INCOMPLETE INFORMATION REGARDING THE TERMS AND FEATURES OF THE CONTRACT.” The complaint was denied.
• July 2015—”CUSTOMER PURCHASED IMMEDIATE ANNUITY IN NOVEMBER, 2013 AND SUBSEQUENTLY FREE-LOOKED CONTRACT IN MARCH, 2014. DAUGHTER OF CUSTOMER, WHO IS CLIENT’S ATTORNEY IN FACT, HAS COMPLAINED TO FINRA (WHICH IN TURN FORWARDED SAID COMPLAINT TO THE TEXAS DEPARTMENT OF INSURANCE)ALLEGING NEGATIVE TAX CONSEQUENCES ARISING OUT OF HER MOTHER’S PURCHASE AND SUBSEQUENT CANCELLATION OF THE IMMEDIATE ANNUITY POLICY.” The complaint was denied.
For a copy of Kimberley Schkade-Hill’s CRD, 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:
• Other investments
• Financial situation and needs
• Tax status
• Investment objectives
• Time horizon
• Liquidity needs
• Risk tolerance
• Any other information disclosed by the customer
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