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John Spach Barred for Trying to Settle Complaint Away from Firm

FINRA barred former Kestra Investment Services (Aliso Viejo, CA) broker John William Spach after he settled a customer dispute away from the firm and refused to cooperate with a subsequent investigation into the alleged misconduct.

AWC #2018058884001

According to the findings, Kestra permitted Spach (CRD #2731192) to resign in June 2018 while investigating whether he violated firm policies while attempting to settle a customer complaint, as well as allegations of co-mingling client assets with his own personal assets, breach of fiduciary duty (including unsuitable investment advice, material misstatements, and disclosure failures), and misrepresentation. In January 2019, Spach informed FINRA that he would not respond to the regulator's request for information, which resulted in FINRA's decision to bar him from the securities industry.

Spach's BrokerCheck file lists the customer dispute at issue—a 2018 settlement for $450,000 after Spach recommended a client invest $475,000 into a promissory note. According to the disclosure, the Spach-recommended note subsequently defaulted, the customer complained, and Spach tried settling the complaint away from and without notifying the firm.

Although Kestra maintains that Spach's misconduct concerned a client of the independent outside business activity NFP Retirement, "not affiliated with Kestra," as we recently wrote about the Woodbridge Group of Companies promissory note fraud, broker-dealers still may be held liable for selling away losses, even when the representative engages in the sale of securties to a non-client.

In addition to NFP Retirement of Westlake Village, CA, Spach's other outside business activities in Southern California include Gen X for America of Beverly Hills and ibotit of Thousand Oaks.

If you have invested with John William Spach—whether at Kestra Investment Services, NFP Retirement, or otherwise—or with any broker or financial adviser whose unsuitable recommendations in a promissory note or other financial product has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.

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