Securities Lawyers Blog
The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Kenneth Savino (Savino).
According to BrokerCheck records, Savino allegedly purchased shares of a security for $100,000 without providing prior notice to his member firm and Savino inaccurately indicated on an annual compliance questionnaire that he had not participated in any private securities transactions. Savino was suspended for 15 days and fined $5,000. Without admitting or denying the findings, Savino consented to the sanctions and the entry of findings.
Savino was discharged from LPL Financial in October 2015 for allegedly entering into a loan transaction with another company, receiving shares of the company in return, with no pre-approval by the firm. Additionally, Savino allegedly made private securities transaction that he did not have pre-approved by the firm. Savino also allegedly introduced a client to a potential outside investment opportunity that was not approved by the firm.
In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers, each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interactions with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Savino was previously registered with Manequity, Inc. from 1983 to 1988. From 1988 to 2010, he was registered with Lincoln Financial Securities Corporation. He worked at LPL Financial LLC from 2010 until he was discharged in 2015. Since December 2015, Savino has been working with FSC Securities Corporation.
Investors who have suffered losses may be able recover their losses through securities arbitration. The investment attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.