According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Joseph Kirkland (Kirkland), previously associated with LPL Financial LLC, has at least 2 disclosable events. These events include one customer complaint, one regulatory event, alleging that Kirkland recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on April 04, 2023.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (‘Exchange Act’) and Section 203(f) of the Investment Advisers Act of 1940 (‘Advisers Act’) against Joseph Kirkland (‘Respondent’). The Commission finds that on October 28, 2022, Respondent pleaded guilty to one count of conspiracy to commit wire fraud in violation of Title 18, United States Code, Sections 1349 and 1343 before the United States District Court for the District of Puerto Rico, in United States v. Joseph Kirkland, et al., Crim. No. 3:21-cr-00082-ADC-MDM (D.P.R.). Respondent is awaiting sentencing. In his guilty plea, Respondent stipulated that from on or about March 2016 to on or about June 2018, he conspired with others to defraud the Municipality of Mayag\\u00fcez, Puerto Rico (the ‘City’) and its municipal enterprise, Mayag\\u00fcez Economic Development, Inc. (‘MEDI’), and to obtain money and property by means of materially false and misleading statements involving the City’s funds. Respondent was the registered representative responsible for MEDI’s brokerage account at UBIS, which held $9 million of the City’s funds earmarked for improving a local trauma center. Respondent made and caused to be made materially false statements to the City, through electronic messages, asserting that the City’s $9 million in principal was invested at a high rate of return. In reality, Respondent caused financial transactions that depleted the City’s funds and converted a portion of the City’s funds to Respondent’s own personal use.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $7,000,000.00 on May 25, 2021.
The Statement of Claim alleges that the individual worked with an investment advisor retained by the customer (a municipal enterprise) to prepare a letter fraudulently inducing the customer to deposit funds for investment at the firm, which occurred on or around March 29, 2016. The Statement of Claim\<char_lb_r>\, further alleges that the individual established a margin account for the customer and during the month of April 2016 used the margin facility to borrow and initiate transfers of such loan proceeds out of the customer’s account at the firm and, ultimately, into personal and corporate accounts controlled by himself and co-conspirators.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. This standard applies when a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or accounts.
The care obligation also requires the broker to address the client’s specific needs through obtaining specific investment profile information on the client. The associated person typically will ask the customer for information such as the investor’s risk tolerance or ability to withstand account value declines or increases; experience with investments available; investment objectives and goals; investment time horizon; liquidity needs; assets such as investment accounts held at other financial institutions; tax information; their age and retirement plans; and other information that a customer may want to provide to the advisor to help them to properly address the services needed. The SEC has stated that Reg BI is drawn from fiduciary principles that are common to both brokers and investment advisors including an obligation to act in the investor’s best interest and prohibiting an advisor from placing their own interests ahead of the investor’s. There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which require brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations include three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions.
Another aspect of the care obligation is focusing on the client’s specific needs which brokers must reasonably understand through obtaining information for the client’s investment profile. In completing a customer’s investment profile the advisor should include information such as the investor’s investment time horizon; liquidity needs; risk tolerance; experience with various investment vehicles; investment objectives and financial goals; assets and debts including outside investment accounts; marital status; tax information; age; and other relevant information that may be individual to the investor that the advisor would need to know to properly render advice or provide services. The associated person must then apply both their reasonable diligence into various investment options as well as the information gathered as to the investor’s specific needs when considering the investment recommendation. The broker must explore various alternative investment options available to address these needs and determine that there is a reasonable basis to believe that the recommendation or service being recommended is in the retail investor’s best interest. An advisor must understand the type of account, securities, and their client in order to meet their care obligations. The type of securities account has the potential to greatly affect retail customers’ costs and investment returns. Different types of securities accounts can offer different features, products, or services, and not all types of accounts or services would be in every investor’s best interest.
Kirkland has been in the securities industry for more than 7 years. Kirkland has been registered as a Broker with LPL Financial LLC since 2017.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein 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.