Kevin Curry Sanctioned By FINRA Over Unauthorized Trading

shutterstock_1081038-300x200According to BrokerCheck records Kevin Curry (Curry) has been sanctioned by The Financial Industry Regulatory Authority (FINRA) over allegations that the broker exercised discretion in a customer’s account without obtaining written authorization or written approval of the account as discretionary from his brokerage firm.  FINRA found that Curry and spoke to the customer and agreed upon investments but that Curry exercised time and price discretion in executing transactions on dates when he had not spoken with the customer in violation of the rules.

In addition, to the FINRA sanctions, two customers have lodged complaints against Curry alleging a number of securities law violations including that the broker made engaged in churning (excessive trading), unauthorized trading, and fraud among other claims.

In June 2014, a customer complaint was filed alleging churning, unauthorized trading, fraud, and failure to supervise claiming $400,000 in damages.  The claim was settled.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time.  Often times the account will completely “turnover” every month with different securities.  This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades.  Churning is considered a species of securities fraud.  The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions.  A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements.  Certain commonly used measures and ratios used to determine churning help evaluate a churning claim.  These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

The number of complaints against Curry are unusual compared to his peers.  According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015.  Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters.  However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher.  Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.

Curry entered the securities industry in 1993.  Since 1998 Curry has been associated with Petersen Investments, Inc. out of the firm’s New York, New York office location.

At Gana LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts.  Claims may be brought in securities arbitration before FINRA.  Our consultations are free of charge and the firm is only compensated if you recover.