• June 27, 2022
• Kestra Investment Services

Denise Sobczak (CRD#: 3078128) is a dually registered Broker and Investment Advisor at Kestra Investment Services, LLC in Fairfield, NJ.

Broker’s Background

She entered the securities industry in 1998 and previously worked for Raymond James Financial Services Advisors, Inc.; Raymond James Financial Services, Inc.; Citigroup Global Markets, Inc.; and Merrill Lynch, Pierce, Fenner & Smith, Inc.

Current And Past Allegations Of Conduct Leading To Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2022, FINRA sanctioned Denise Sobszak with a suspension from all capacities for three months beginning July 5, 2022 and ending October 4, 2022, as well as a civil/administrative penalty of $5,000. The FINRA sanction states, “Without admitting or denying the findings, Sobczak consented to the sanctions and to the entry of findings that she forged signatures on her member firm’s documents. The findings stated that Sobczak forged firm documents by cutting and pasting customers’ initials and signatures from previous documents onto new documents and by cutting and pasting her branch manager’s signature on firm documents. These documents included, among others, new account forms, money movement letters of authorization, automated clearing house (ACH) setup requests, individual retirement account (IRA) beneficiary designations, and cash distribution requests. Sobczak’s branch manager did not give prior permission for the use of his signature. Although Sobczak’s customers did not give prior permission for the use of their initials or signatures, they authorized the activity set forth on the forms in question. The findings also stated that Sobczak falsified firm documents by obtaining the customers’ signatures on blank or incomplete documents. After the customers initialed or signed the blank or incomplete forms, Sobczak added and/or corrected previously missing or incorrect information without having the customer re-execute the form. These documents included, among others, customer account transfer instructions, cash distribution requests, IRA beneficiary designations, and ACH setup requests. Although Sobczak falsified the documents in question, the customers authorized the underlying activity. As a result, Sobczak caused the firm to maintain inaccurate books and records.”

For a copy of the FINRA sanction, click here.

In addition, Denise Sobczak has been the subject of three disclosures, including the following:

• November 2021 — “FINRA’s Department of Enforcement has received a referral involving potential violations of the federal securities laws or FINRA, NASD, or MSRB rules.” The investigation was initiated by FINRA.
• January 2021 — “After a review of the Agent’s disciplinary history, the New Jersey Bureau of Securities asked Agent to sign a heightened supervision agreement as a condition of registration. Agent’s activities have been restricted by the agreement. Agent cannot act in a supervisory capacity; have any legal or beneficial ownership interest, nor exercise any direct or indirect involvement in the direction or control of any broker-dealer or investment adviser or branch office; may not open any new accounts as a broker or investment adviser of record or solicit the opening of any new accounts; and Agent may not solicit, give advice, receive any fees or commissions on any securities or investment advisory business whatsoever, nor be the Agent of record on any accounts.” The New Jersey Bureau of Securities resolved the regulatory action by directing heightened supervision of Denise Sobczak’s work as a condition of her registration.
• September 2020 — “Violated firm policies related to document integrity, including, by accepting blank, signed forms from clients; copying and pasting client signatures and initials to account documents; and copying and pasting the Branch Manager’s signature to account documents.” Denise Sobczak was discharged from Raymond James Financial Services, Inc.

For a copy of Denise Sobczak’s FINRA BrokerCheck, click here.

We Help Investors Recover Investment Losses

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 age, 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, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis.  Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., 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 mwolper@wolperlawfirm.com.