Cetera Advisors Terminated Scott Kozak For “Violating Firm Policy Prohibiting Securities Transactions”
The Wolper Law Firm is currently investigating claims against Scott Kozak, a former Financial Advisor at Cetera Advisors in Highlands Ranch, Colorado. Scott Kozak has been in the securities industry since the 1980s and previously worked at Financial West Group
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on July 23, 2018, Scott Kozak was terminated by Cetera Advisors for :violating firm policy prohibiting personal securities transactions.” This practice is referred to as “selling away.” Scott Kozak is under investigation by FINRA for selling away, which likely prompted his termination.
FINRA strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
In addition, Scott Kozak has four prior customer complaints for sales practice violations, including:
- December 2008—“Clients requested rep liquidate positions…they allege rep did not follow instructions.” The matter was settled for $27,500
- October 2008—Customer alleged “misrepresentation and failure to follow instructions to place trades.” The matter went to a final arbitration hearing and resulted in an award of $51,750.
- February 2005—Customer “alleges Mr. Kozak misled them when VA was purchased.”
To review a full copy of Scott Kozak’s FINRA disclosure report, click https://brokercheck.finra.org/individual/summary/1272583#disclosuresSection
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Trading long-term investment vehicles in short duration is per se improper as it presents very little benefit to the customer and only benefits the Financial Advisor, who earns commissions. 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.
If you or someone you know was a customer of Scott Kozak’s and you experienced investment losses, please contact the Wolper Law Firm at 800.931.8452 or by email at mwolper@wolperlawfirm.com to discuss your specific situation and the legal options available. The Wolper Law Firm represents investors nationwide in securities litigation and arbitration.
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.
