- January 22, 2025
- Fraud
- Howard Kavinsky
- Misrepresentation
Howard Kavinsky (CRD#: 5881623) was a previously registered broker and investment advisor.
Broker’s History
He entered the securities industry in 2011 and previously worked with Hornor, Townsend & Kent, Inc.; Morgan Stanley; David A. Noyes & Company; National Securities Corporation; B. Riley Wealth Management; and Supreme Alliance LLC.
Current and Past Allegations of Misconduct
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in December 2024, without admitting or denying the findings, Kavinsky consented to the sanction and to the entry of findings that he falsified at least 190 consolidated account statements for at least eight customers, some of whom were seniors, by overstating the customers’ account balances and reflecting fictitious investments in a hedge fund. The findings stated that Kavinsky also falsified the consolidated account statements for at least six of these customers to reflect that he had invested a portion of their funds in a hedge fund, even though he had not made any such investments. The findings also stated that Kavinsky provided false and misleading information and testified falsely to FINRA. In a request sent to Kavinsky, FINRA requested that he identify all customers for whom he had ever misrepresented account values on any document. Kavinsky responded falsely by naming only a married couple who had already complained about Kavinsky to the firm. At the time that Kavinsky made this response, he knew it was false and that he had actually overstated the account values for at least eight customers on their consolidated account statements. Moreover, during on-the-record testimony that FINRA conducted, Kavinsky repeatedly testified falsely that he never told any of his customers that they were invested in any hedge funds. As a result, Kavinsky consented to the imposition of the following sanction:
- a bar from associating with any FINRA member in all capacities.
For a copy of the FINRA Disciplinary Action Details, click here.
In addition, Howard Kavinsky has been the subject of six other disclosures:
- June 2024—“ Clients claim RR refuses to provide them with copies of their statements and they believe their account balances are inaccurate. Attorney for clients further alleges over the course of the past two years, client funds have gone missing including qualified funds being removed from qualified accounts and representative provided false and misleading information pertaining to account balances.” The damage amount requested was $760,000 and the customer dispute is still pending.
- May 2024—Discharged by B. Riley Wealth Management, “Failure to follow Firm procedures related to the creation and use of consolidated client reports and providing untrue responses on annual compliance questionnaires related to such activity; misrepresenting customers’ account values; creating unfounded customer statements purportedly from a clearing firm; and failing to forward potential customer grievances for further review by firm personnel.”
- May 2019—“Financial Settlement.”
- May 2019—“ Financial Settlement.”
- April 2019—“Compromise.”
For a copy of Howard Kavinsky’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.
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.
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. 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 mwolper@wolperlawfirm.com.