- August 12, 2019
- Morgan Stanley
Ken Kavanaugh (CRD # 4502223) was a Financial Advisor at Morgan Stanley in New York, NY. Ken Kavanaugh has been in the securities industry since 2002 and previously worked at Citigroup Global Markets and UBS Financial Services.
According to publicy available records released by the Financial Industry Regulatory Authority (FINRA), FINRA recently suspended Ken Kavanaugh from acting as a broker or otherwise associating with a broker-dealler for 18 months for allegedly “engag[ing] in outside business activities without providing prior written notice to his member firm.”
For a copy of the FINRA sanction, click http://www.finra.org/sites/default/files/fda_documents/2018058564001%20Ken%20Kavanagh%20CRD%204502223%20AWC%20jm.pdf.
In April 2018, Ken Kavanaugh “volunatorily resigned” from Morgan Stanley after allegations he engaged in the “provision of services to clients outside the scope of the firm’s services.
For a copy of Ken Kavanaugh’s BrokerCheck report, click https://brokercheck.finra.org/individual/summary/4502223.
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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