Former LPL Financial And Current Royal Alliance Broker, Kevin Barletta, Supsended by FINRA For Two Months And Fined $5,000 For Alleged Improper Trading Practices With REITs
Kevin Barletta (CRD # 4691033) is currently registered at Royal Alliance Associates, Inc. in Hawthorne, NY. from 2008-2019. Kevin Barletta has been in the securities industry since 2003 and previously worked at LPL Financial LLC, IDS Life Insurance Company, and Ameriprise Financial Services, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on October 15, 2020, Kevin Barletta was suspended for two months and fined $5,000.
According to the sanction “Without admitting or denying the findings, Barletta consented to the sanctions and to the entry of findings that he circumvented his member firm’s WSPs in connection with prohibited cross trades of alternative investment products by falsifying journal entry forms to effect unlisted REITs sales from one customer account to other customer accounts. The findings stated that Barletta instructed the sellers to sign one set of journal entry forms to transfer the shares, and the buyers to sign another set of forms to transfer cash payment for the shares. After the customers signed the forms, Barletta altered them to inaccurately describe the parties to the transactions as friends and the transfer of shares as gifts. All customers consented to the transactions and Barletta received no commissions on them. Barletta’s conduct prevented the firm from detecting the prohibited transactions and performing its suitability review. The findings also stated that Barletta’s conduct caused the firm to create and maintain inaccurate books and records. Barletta’s conduct caused the firm to fail to create trade tickets identifying the terms and conditions of the customers’ orders, include the transactions in the firm’s blotter, send customer confirmations, or properly identify the transactions on account statements as purchase and sales of securities.”
For a copty of the FINRA sanction click here
On December 22, 2016, Kevin Barletta was discharged from LPL Financial LLC following allegations that the “firm reasonably concluded that advisor failed to adhere to policy regarding cross-trades.”
For a copy of Kevin Barletta’s CRD click here
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:
• Other investments
• Financial situation and needs
• Tax status
• Investment objectives
• Time horizon
• Liquidity needs
• Risk tolerance
• Any other information disclosed by the customer
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