Kestra Investment

Jeffrey Blutstein Barred From the Securities Industry Over Undisclosed Activity

September 22, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor Jeffrey Blutstein (Blutstein) engaged in undisclosed outside business activities (OBAs) that were not approved by his brokerage firm. Blutstein, formerly registered with American Portfolios Financial Services, Inc. (American Portfolios) and Kestra Investment Services, LLC (Kestra Investment) out of New York, was barred from the financial industry according to records kept by The Financial Industry Regulatory Authority (FINRA). In addition, Blutstein disclosed one employment termination for cause and one criminal complaint.

In July 2019 FINRA found that Blutstein consented to the sanction and to the entry of findings that he refused to provide documents and information requested by FINRA in connection with an investigation into whether he potentially violated FINRA rules by engaging in undisclosed outside business activities while associated with a member firm. Accordingly, Blutstein was automatically barred from the securities industry.

At this time it is unclear what OBA Blutstein engaged in that FINRA was investigating and whether or not that activity also involved private securities transactions. Blutstein’s public disclosures state that he was involved in a number of OBAs including Financial Logistics, an insurance business, among other businesses. It is unclear if these OBAs were the subject of FINRA’s investigation.

John Spach Barred Over Securities Laws Violations

April 25, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor John Spach (Spach), formerly employed by Kestra Investment Services, LLC (Kestra) has been subject to at least one customer complaint, one regulatory action, and one employment termination for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), Spach’s customer complaint alleges that Spach introduced a client of his independent advisory firm to an outside investor. The client allegedly invested $475,000 and received a promissory note that defaulted.

Thereafter, in July 2018 NFP Retirement Inc. (NFP) discharged Spach claiming violations of the Investment Advisers Act of 1940 including co-mingling client assets with his own personal assets, breach of fiduciary duty, unsuitable investment advice, material misstatements, failure to disclose material conflicts of interest, circumvention of compliance policies and procedures, and affirmative misrepresentations to the firm.

Finally, in February 2019 FINRA sanctioned Spach alleging Spach consented to the sanction and findings that he refused to produce documents and information requested by FINRA in connection with its investigation into potential violations relating to a customer complaint. FINRA found that his former firm disclosed that he had been permitted to resign while under internal review relating to the potential violation of various firm policies while attempting to settle a customer complaint with a client of his registered investment advisor.

Brokerage Firms Sanctioned $6.2 Million Over Sale of L-Share Variable Annuities

November 15, 2016 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) announced that it has fined eight brokerage a total of $6.2 million for failing to supervise sales of variable annuities (VAs). Five of the firms were required to pay more than $6 million to customers who purchased L-share variable annuities that came with potentially incompatible, complex and expensive long-term minimum-income and withdrawal riders.

FINRA’s enforcement actions were against the following firms.

VOYA Financial Advisors Inc. – fined $2.75 million.