Securities Lawyers Blog

According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Kyle Chapman (Chapman), previously associated with American Trust Investment Services, Inc., has at least one disclosable event. These events include one tax lien, alleging that Chapman recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.

FINRA BrokerCheck shows a final customer complaint on September 05, 2024.

Without admitting or denying the findings, Chapman consented to the sanctions and to the entry of findings that he willfully violated Rule 15l-1(a)(1) under the Securities Exchange Act of 1934 Reg BI) by making a recommendation that was not in the customer’s best interest nor suitable with the customer’s investment profile. The findings stated that Chapman recommended his customer invest $50,000 in a speculative, unrated debt security after the customer reached out to Chapman about investing in the security. The customer’s investment objectives were income and preservation of capital and did not include speculation. Chapman failed to perform reasonable diligence on the security before recommending it to the customer and did not conduct a reasonable review of the offering documents. Chapman earned $1,471 in commissions from these recommendations. The findings also stated that Chapman made negligent misrepresentations and omissions of material fact when recommending the debt security to his customer. Chapman sent third-party risk reports to the customer that assigned a risk score to the debt security with the same risk score of cash. Chapman did not correct the customer’s belief that debt securities were a conservative investment.