• October 23, 2023
• Western International Securities

Christopher B. Kennedy (CRD#: 4498061) is a previously registered broker and investment advisor.

 

Broker’s Background

He entered the securities industry in 2002 and previously worked for Western International Securities, Inc; Spartan Capital Securities, LLC; Financial West Group (FINRA Expelled this firm); Multi-Financial Securities Corporation; and RBC Dain Rauscher Inc.

 

Allegations of Misconduct

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in July 2023, FINRA made a preliminary determination to recommend disciplinary action against Christopher Kennedy alleging willful violations of Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5 thereunder and violations of FINRA Rules 2020 and 2010 in that Kennedy churned customer accounts; willful violations of the Best Interest and Care Obligations of Exchange Act Rule 15l-1 (Regulation Best Interest) and violations of FINRA Rule 2010 in that Kennedy excessively traded customer accounts; violations of FINRA Rules 3260(a) and 2010 in that Kennedy effected discretionary transactions excessive in size or frequency in customer accounts; violations of FINRA Rules 3260(b), 2360(b)(18)(A), and 2010 in that Kennedy used discretion without written authorization to trade securities including options in customer accounts; violations of FINRA Rule 2010 in that Kennedy falsified customer account statements and made false statements to customers; and violations of FINRA Rules 8210 and 2010 in that Kennedy provided false and misleading testimony and information in response to FINRA Rule 8210.

 

Christopher B. Kennedy has been the subject of 12 other FINRA disclosures, which include the following:

• June 2022—“ Claimant alleges misrepresentation, suitability of transactions, and breach of fiduciary duty in the management of the account.” The damage amount requested was $120,694. The customer dispute settled for $75,000.
• May 2022—“ Losses sustained by virtue of unauthorized trading.” The customer dispute settled for $375.000.
• March 2022—“ Engaged in extensive and unauthorized trading without clients knowledge or consent.” The damage amount requested is $2,453,936.28, and the customer dispute is still pending.
• January 2022—“ Client alleged through counsel on August 24, 2021, that Kennedy had begun in February 2021 to use margin without approval of the Client family accounts and that during the week of July 26th Kennedy had engaged in improper options trading for Client. Claimant allegations, include but not limited to, Breach of Fiduciary duty.” The damage amount requested was $5,424,035.00 and the customer dispute settled for $3,800,000.
• December 2021—“ Client alleges breach of fiduciary duty, unauthorized trading, and breach of contract.” The damage amount requested was $245,000. The customer dispute settled for $125,000.
• November 2021—“ Customer expressed concern of the handling of his account.” The damage amount requested was $36,870.52. The customer dispute settled for $36,870.52.
• November 2021—“ Claimant raised concerns regarding misrepresentation and negligence in handling accounts.” The damage amount requested was $40,731.26. The customer dispute settled for $40,731.26.
• November 2021—“ Claimant alleged breach of contract, fiduciary duty, and negligence in handling the account.” The damage amount requested was $375,000. The customer dispute settled for $245,000.
• September 2021—“ The Client has alleged that his account lost 300K over the past few months and that Kennedy was trading without authority from the client or supervision from Western.” The customer dispute settled for $450,000.
• September 2021— “Client alleged through counsel that Kennedy forged and denied access to client account statements in order to hide allegedly improper trading in the Client’s account occurring from December 2020 through August 2021, including options trading conducted in the last week of July 2021 which led to these allegations.” The customer dispute was settled for $2,760,000.
• August 2021—“Clients have alleged unauthorized options trading and failure to adhere to discretionary options sales orders.” Discharged from WESTERN INTERATIONAL SECURITIES, INC.
• June 2008—“ CLIENT ALLEGES RBC IGNORED A 10% STOP LOSS ORDER ON ALL INVESTMENTS IN 2008, AND REQUESTS THAT THEY BE REIMBURSED FOR EVERY LOSS ABOVE 10%.” The damage amount requested was $200,000. The customer dispute was settled for $40,000.

 

For a copy of Christopher B. Kennedy’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 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 mwolper@wolperlawfirm.com.