- March 25, 2019
- Kestra Investment Services
John W Spach is a former Financial Advisor at Kestra InvestmentServices, LLC in Aliso Viejo, CA. John Spach has been in the securities industry since 1996 and previously worked at MML Investors Services, Inc., NFP Securities, Inc., Sentra Securities Corporation and Financial West Group, Financial Telesis, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on February 21, 2019, FINRA sanctioned John Spach, barring him indefinitely from the securities industry for the following:
“Without admitting or denying the findings, Spach consented to the sanction and to the entry of findings that he refused to produce documents and information requested by FINRA in connection with its investigation into potential violations relating, in part, to a customer complaint noted on his Form U5. The findings stated that Spach’s member firm filed a Form U5 terminating his registration and disclosing that he had been permitted to resign while under internal review relation to the potential violation of various firm policies while attempting to settle a customer complaint with a client of his registered investment advisor.”
For a full copy of the sanction, click http://www.finra.org/sites/default/files/fda_documents/2018058884001%20John%20William%20Spach%20CRD%202731192%20AWC%20va.pdf
The referenced customer complaint alleged, “John Spach, a registered representative associated with Kestra, introduced a client of his independent RIA (not affiliated with Kestra), to an outside investor. The client invested $475,000 and received a promissory note. The RRs client is not a client of Kestra. The promissory note defaulted. Following such default, the client made an oral complaint to the RR, who agreed to settle and pay the client the balance of the note, plus interest per year until paid in full.” The matter settled for $450,000.
For a copy of John Spach’s CRD, click https://brokercheck.finra.org/individual/summary/2731192#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 Financial Industry Regulatory Authority (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.
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