Ex-Western International Securities (Tarzana and Woodland Hills, CA) broker Christopher Booth Kennedy churned and falsified documents in customer accounts, resulting in $2.3 million in losses while racking up commissions and margin interest, according to a settlement order filed just months after FINRA initially accused Kennedy of excessively trading Western International Securities client accounts.
The now-former Southern California broker Chris Kennedy (CRD #4498061) settled 10 customer disputes, according to his BrokerCheck report, alleging misconduct ranging from excessive trading without authority or authorization to breach of fiduciary duty and misrepresentation to forgery and denying a client access to account statements.
Kennedy agreed to pay over $7 million to settle these customer complaints, including a single dispute settled for $3.8 million that alleged use of margin without approval, improper options trading, and breach of fiduciary duty. Western International discharged Kennedy in 2021 over the unauthorized options trading allegations.
The recent settlement order takes it a step further, charging Kennedy with securities fraud by churning, which is fraudulent conduct that occurs when a broker who exercises control over a customer account engages in excessive trading with the intent to defraud, or with reckless disregard of the customer's interests. Churning goes beyond simple unsuitability due to its defrauding intent or reckless disregard requirement.
FINRA also found that Kennedy's excessive trading violated the federal Securities Exchange Act's Regulation Best Interest, which is a more aggressive attempt by FINRA and the SEC to crack down on brokers and investment advisers who fail to act in the best interests of their customers. FINRA's first Regulation BI sanction occurred in 2022 when the regulator charged Network 1 Financial Securities broker Charles Malico for excessive transactions and improper trading recommendations.
Finally, FINRA found that Kennedy provided false account statements, false information, and gave false testimony during the course of the investigation.
As a result, FINRA ordered Chris Kennedy barred from service as a broker.
If you invested with former Western International Securities broker Christopher B Kennedy or with any investment adviser or registered representative who has churned, excessively traded, or used margin or discretion without authorization, resulting in losses or other damages, such as excessive commissions and fees, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.