Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Kevin Cory (Cory), previously associated with R. F. Lafferty & Co., INC., has at least one disclosable event. These events include one regulatory event, alleging that Cory recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on May 26, 2023.
Without admitting or denying the findings, Cory consented to the sanction and to the entry of findings that he intentionally misrepresented and omitted material facts in communications with his former customers. The findings stated that when Cory was not registered or associated with a member firm, two of his former customers, a married couple, invested $500,000 of their retirement funds in a purported investment fund formed and managed by Cory. The offering memorandum for the fund, which was prepared by Cory, represented that the fund’s strategy was to invest in global equity securities, with an overall long market bias. However, instead of pursuing this strategy, Cory used the former customers’ funds to make loans to various small businesses, including businesses owned by Cory or managed by his friends and associates. The small businesses, including those owned by Cory, defaulted on the loans from the fund. As a result, the fund had no assets, and its corporate registrations were cancelled for failure to pay taxes. After Cory associated with a firm, the former customers made periodic inquiries with him regarding their investment in the fund and requested account statements for their investment. Cory prepared and sent the former customers fictitious account statements wherein he intentionally misrepresented that their investment in the fund had risen in value when, in fact, their investment was worthless. Cory also intentionally misrepresented and omitted material facts regarding the value of the former customers’ investment in the fund, the nature of the fund’s loans to small businesses, and his collection efforts on the overdue loans. In addition, Cory falsely claimed that individuals other than him were responsible for preparing financial information for the fund. The findings also stated that Cory violated FINRA’s standards for communications with the public by distributing false and misleading communications to his former customers.