The White Law Group is investigating potential securities claims involving Kovack Securities, Inc. (CRD #44848, Fort Lauderdale, FL)
Kovack Securities, LLC, headquartered in Fort Lauderdale, FL, is a national financial advisory firm. The firm reportedly has 9 disclosure events on its broker record including 4 regulatory events, 5 arbitrations.
Broker Misconduct and Customer Complaints
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
There have been several cases of registered representatives employed by Kovack Securities who were allegedly involved in broker misconduct and fraudulent activities.
February 2018 – FBI Investigation Uncovers Investment Fraud Scheme with Broker Jason Mininger
Former Kovack Securities advisor Jason E. Mininger reportedly pleaded guilty to wire fraud and money laundering in an investment fraud scheme in February 2018.
From January 2014 to May 2017 Mininger allegedly led clients to believe that he needed to use their previously invested funds as part of a new series of investments that he would make or manage.
Instead, Mininger allegedly deposited the funds into his own bank account and used the investors’ money for his personal expenses, reportedly resulting in at least $870,000 in losses to his clients.
According to his FINRA BrokerCheck report, Mininger was affiliated with Kovack Securities Inc. in Rocklin, CA from December 2012 until December 2014.
His broker report indicates that Mininger has 8 customer disputes filed against him. Allegations include unauthorized transactions, churning, excessive trading, and misrepresentation.
December 2016 – FINRA barred former Kovack advisor Andrew Corbman after he allegedly refused to appear for on-the-record testimony connection with FINRA’s investigation into Corbman’s termination from his member firm, as well as allegations against him regarding unsuitable and unauthorized trading.
Corbman was reportedly registered with Kovack Securities from 2011 until 2015. According to his FINRA BrokerCheck report, Corbman has 19 customer complaints filed against him during his career in the securities industry. Allegations include unsuitability, over-concentration, unauthorized investments, and breach of contract, among others. Corbman, who was based in Lansdowne, VA, has also reportedly been the subject of at least two regulatory events and one employment separation.
Kovack Securities Lawsuits
Brokerage firms are required to supervise their advisors to ensure that they are complying with FINRA rules. If it can be determined that advisors violated FINRA rules and their employers failed to adequately supervise them, these firms can be held responsible for any resulting losses in a FINRA arbitration claim.
FINRA Sanctions Kovack Securities
Kovack Securities has also reportedly had issues with regulators.
May 2016 FINRA sanctioned Kovack after it failed to apply sales charge discounts to certain customers’ eligible purchases of unit investment trusts and failed to establish and maintain adequate supervisory procedures related to such.
FINRA’s complaint alleges that Kovack Securities’ failure to apply discounts to eligible purchases resulted in customers paying excessive sales charges of $119,319.27, in violation of FINRA rules. The firm was censured, issued a fine of $125,000, and ordered to pay restitution to affected customers.
Free Consultation with a Securities Attorney
The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.
If you have concerns regarding investments you purchased through Kovack Securities and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.