San Diego "Financial Whiz of Local Airwaves" Kyle Harrington Barred After Conversion, Undisclosed Private Securities Transaction Investigations

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FINRA barred former National Securities Corporation (San Diego) broker Kyle Patrick Harrington for allegedly trying to obstruct FINRA and firm investigations into allegations that he converted customer funds, and for selling private securities away from the firm, which at least one client later claimed was a fraudulent scheme.

This marks Harrington (CRD #2282328)'s second time under review for conversion. Prior to his joining National Securities Corp in 2012, Harrington's previous firm, Matrix Capital Group, permitted his 2011 resignation in the midst of another investigation. In 2016, National Securities terminated Harrington after an internal review revealed "the appearance of conversion of client funds at [a] broker-dealer affiliate."

Related: 2017 Complaint Charges Harrington, Linda Milberger with Deception, Conversion, Concealment, Selling Away

Current: OHO Decision #2015047303901

The Matrix Capital Group separation occurred during a firm investigation that uncovered Harrington's failure to timely report a bankruptcy filing. During that investigation, Matrix found that Harrington instructed a customer of his to wire $20,000 into Harrington's account, selling off securities from the client's trust account to generate additional cash when Harrington found out that the customer only had around $7,250 in available cash in the account.

The Matrix investigation turned up other irregularities, such as the following finding: "There was no evidence that...[the customer] ever signed the $7,245 wire request form," and that "Harrington Capital Management" (founded and managed by Harrington in San Diego) was listed as beneficiary on all three wire requests.

Instead, FINRA's evidence indicated that the customer's "Trust and SEP IRA accounts suffered losses."

Harrington also apparently attempted to use his rental properties in La Jolla, California as justification for the transfers, claiming they were "payment" for rent. FINRA rebuffed this by determining that the customer likely never stayed at the La Jolla rental to begin with.

The undisclosed private securities transaction charge came about through Harrington selling more than 300,000 shares of Islet Sciences, Inc to clients at National Securities, answering "no" on various compliance questionnaires that asked about private securities transactions.

Several customer disputes filed since then and alleging common law fraud, misrepresentation, unsuitability, excessive trading, churning, over-concentration, breach of fiduciary duty, negligence, and forgery, have since been settled or resulted in award/judgment via arbitration.

FINRA found that Harrington attempted to obstruct the regulator's subsequent investigation by providing false evidence, such as bank statements and other spreadsheets, and by directing fabrication of rental agreements relative to the La Jolla properties.

Harrington's BrokerCheck report lists occasional appearances on television and radio (Fox News Channel, CNBC, KUSI-TV San Diego, KCBQ 1170 AM-San Diego); in September 2017, the San Diego Reader called Harrington a "financial whiz of local airwaves" in reporting that he had been charged with taking money from a client and falsifying documents to conceal the misconduct.

If you have invested with National Securities Corporation (San Diego) ex-broker Kyle Patrick Harrington or with any registered representative or financial adviser who has illicitly attempted to convert funds, or who has sold you private securities away from the firm, resulting in losses or other damages, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.

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