Securities Lawyers Blog
A FINRA disciplinary action against a brokerage firm resolves the regulator’s case, not the customers’ losses. Investors who held accounts at Kestra Investment Services, LLC during the periods covered by the actions below may have claims of their own. The securities arbitration attorneys at Gana Weinstein LLP represent investors in FINRA arbitration against brokerage firms and can review your accounts, free of charge, to tell you whether the conduct FINRA described affected you.
Kestra Investment Services is the broker-dealer subsidiary of Kestra Financial, providing brokerage, investment advisory and insurance services along with business management technology for independent financial professionals. Kestra Financial was established in 1997 and is headquartered in Austin, Texas, and ranks among the larger independent broker-dealers in the United States by revenue.
Kestra Investment Services, LLC – By the Numbers:
- CRD #: 42046
- Regulatory Events: 14
- Arbitration Events: 2
- Broker Employees: 1,959
Kestra Investment Services, LLC – In the News:
FINRA v. Kestra Investment Services, LLC (Case #2018060228201) – From approximately November 2017 until February 2019 (the “Relevant Period”), Kestra caused certain recruited registered representatives to take nonpublic personal customer information from the firms where the representatives were then registered and to disclose it to a third-party vendor that assisted the representatives with their transition to Kestra, without the other broker-dealers’ or the customers’ knowledge or consent, causing those broker-dealers to violate the SEC’s Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Information (“Regulation S-P”). As a result, Kestra violated FINRA Rule 2010.
FINRA v. Kestra Investment Services, LLC (Case #2016048404601) – Between July 1, 2009 and February 22, 2018 (the “Relevant Period”), Kestra disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge (“Eligible Customers”). Instead of selling these customers Class A shares with no front-end sales charge, Kestra sold these Eligible Customers Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. During this period, Kestra failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, Kestra violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014), FINRA Rule 3110 (for misconduct on or after December 1, 2014), and FINRA Rule 2010.
FINRA v. Kestra Investment Services, LLC (Case #2014039418401) – Between October 1, 2013 and June 30, 2014 (the “Relevant Time Period”), Kestra failed to reasonably supervise its registered representatives’ recommendation of multi-share class variable annuities (“VAs”) to its customers. Kestra also failed to provide training to its registered representatives and principals on the sale and supervision of multi-share class VAs. By engaging in this conduct, Kestra violated NASD Rule 3010(a) and (b), and FINRA Rules 2010 and 2330(d) and (e). Moreover, Kestra also failed to establish, maintain, and enforce an adequate supervisory system, including written supervisory procedures, that was reasonably designed to review and monitor consolidated reports sent to customers by registered representatives. By engaging in this conduct, Kestra violated NASD Rule 3010(a) and (b), and FINRA Rule 2010.
Gana Weinstein LLP represents investors nationwide, including customers of Kestra Investment Services, LLC, in FINRA arbitration claims to recover investment losses caused by unsuitable investments, failure to supervise, and other broker misconduct. Our consultations are free and there is no obligation.