- February 1, 2020
- O.N. Equity Sales
Kevin Meadows (CRD # 2878889) was a Financial Advisor at Cape Securities and is currently a Financial Advisor at IBN Financial Services in Liverpool, NY. Kevin Meadows has been in the securities industry since since 1997 and previously worked at First Allied Securities.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in January 2020, FINRA sanctioned Kevin Meadows, suspending him for a period of three months. The FINRA sanction was based on allegations that “he excessively and unsuitably traded a senior customer’s accounts that resulted in a loss of approximately $39,671. The findings stated that Meadows controlled the trading in these accounts by recommending almost all of the trades. Meadows’ trading in the customer’s accounts was excessive and unsuitable given the customer’s financial circumstances and investment objectives.”
Excessive trading often occurs when a Financial Advisor puts his or her interests ahead of the clients and makes transactions solely for the purpose of generating commissions. Financial Advisors have a regulatory duty to recommend suitable investment strategies. One of the components of the suitability analysis is quantitative suitability.
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.
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2018057846301%20Kevin%20Kimball%20Meadows%20CRD%202878889%20AWC%20sl.pdf
In addition to the FINRA sanction, Kevin Meadows has other disclosures reflected on his CRD. In 2013, he was “permitted to resign” from First Allied Securities after the “firm determined that the registered representative’s approach involved active trading with which the firm was not comfortable.”
Kevin Meadows has four customer complaints reflected on his CRD, including the following complaints:
- March 2006—”CLAIMANT ALLEGES UNAUTHORIZED TRADES AND USE OF MARGIN IN ACCOUNTS. CLAIMANT REQUESTED A VOLUNTARY MEDIATION WITHOUT GOING THROUGH ARBITRATION/LITIGATION.” The matter was settled for $50,000.
- January 1999—”ALLEGED BREACH OF FIDUCIARY RESPONSIBILITY IN GIVING ADVICE ON THE PURCHASE OF ZAPATA STOCKS.” The matter was settled for $7,826.
For a copy of Kevin Meadows’ CRD, click https://brokercheck.finra.org/individual/summary/2878889#disclosuresSection
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.
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.