Former Western International Broker Under Investigation by Regulators
Another former Western International broker faces heat from regulators
Western International Securities, which was acquired by LPL this year, finds itself under scrutiny once again. Chris Kennedy, a former financial advisor at Western International Securities, recently reached a $2.1 million settlement with the Securities and Exchange Commission. The settlement comes in the wake of allegations of high volume trading, referred to as churning in the securities industry.
This year has been a challenging one for some of the legacy financial advisors at Western International Securities, following LPL Financial Holdings’ acquisition of the firm as part of its purchase of the Atria Wealth Solutions Inc. network of broker-dealers. Kennedy’s settlement with the SEC this week sheds light on regulatory concerns surrounding the firm.
The SEC accused Kennedy of making false and misleading statements to his clients about the success of his trading strategy. Additionally, he allegedly sent falsified account statements to clients, inflating the value of their accounts. Notably, Kennedy’s misconduct resulted in significant financial losses for his clients totaling over $9 million.
This isn’t the first time Western International Securities has faced regulatory issues. Earlier this year, the firm was involved in regulatory matters amounting to nearly $1.7 million in penalties. In one case, the SEC settled with Western International Securities over charges related to operating under Regulation Best Interest in the sale of bonds issued by GWG Holdings.
In a separate incident, a broker was barred by Finra after being accused of misappropriating client funds over a period of 17 years. The broker, who was terminated from Western International Securities in June, was found to have mishandled client money over an extended period before facing consequences.
Kennedy, who was registered with Western International Securities from 2019 to 2021, was barred from the securities industry by Finra last year. During his 18-year career in the securities business, which began in 2002, Kennedy worked at five different firms before the SEC took action against him.
Despite numerous warnings and actions taken by regulators, the problems at Western International Securities seem far from over. The ongoing regulatory challenges serve as a cautionary tale for investors in the securities industry. It reinforces the importance of due diligence and vigilance when dealing with financial advisors and brokers.
