Independent Financial Group Broker Barred by FINRA for Unsuitable Investments
A former Independent Financial Group broker, Kyusun Kim, has been barred by the Financial Industry Regulatory Authority (FINRA) for making unsuitable investment recommendations to elderly clients and failing to disclose the risks, resulting in substantial customer losses. The bar prohibits Kim from acting as a broker or otherwise associating with a broker-dealer firm indefinitely. Elderly investors are among the most vulnerable of investors and FINRA has focused over the past several years on curtailing elder financial abuse.
Independent Financial Group Broker Recommend Illiquid Investments
Between 2008 and 2015, Kim made unsuitable investment recommendations to several elderly clients that resulted in the purchase of illiquid alternative investments. The recommendations resulted in the elderly investors concentrating their retirement assets in speculative and alternative securities.
As many of the clients were elderly, the recommendations did not align with their moderate or conservative investment profiles. Many of the clients also had little or no investment experience than their 401(k) and pension plans and had never before purchased alternative investments.
FINRA said that in one case Kim recommended a customer, who was 71 at the time, liquidate his 401(k) and pension in order to invest in non-traded REITS and structured notes despite the customer’s moderate risk tolerance. Recommendation of this nature often are driven by the broker’s desire to generate the large commissions that such investments often charge to customers. While making the recommendations, Kim failed to disclose the risks associated with these products. The investments resulted in considerable losses for the investors.
Broker Falsified Document, Inflated Net Worth to Make Sales
According to regulatory filings, Kim also falsified customer’s net worths on account forms so that they appeared eligible to buy certain speculative investments, even though they were not.
Independent Financial Group had certain procedures in place to limit the amount of a customer’s net worth that could be concentrated in alternative investments. By inflating net worth and entering inaccurate information, Kim circumvented these procedures to make the sales.
Broker’s Misconduct Totals to $3M in Settlements
According to Kim’s BrokerCheck report, he has been involved in 23 customer disputes dating back to his early years working in the securities industry. To date, the settlement amounts resulting from Kim’s misconduct total just under $3 million, with several disputes not yet resolved.
The first complaint filed in 2007 alleged that Kim forged client signatures, resulting in the transfer of policies. Subsequent customer disputes alleged negligence, misrepresentation and omission, unsuitable investments, fraud, breach of contract, and violations of state and federal securities laws. Not only are these allegations a breach of a broker’s duty to an investor, the fact that Kim repeatedly committed acts of misconduct and was able to continue working in the industry is abhorrent. While many brokers treat their customers fairly, the securities industry, unfortunately, has many other brokers with long track records of customer abuses. Investors should refer to FINRA’s BrokerCheck reports before hiring brokers to determine if a broker has prior customer complaints.
Kim began his securities career in 1997 and joined Independent Financial Group in 2006. He was with the firm for 10 years before he joined Sandlapper Securities in 2016. Without admitting or denying the findings, Kim consented to the sanction and to the entry of findings that he made unsuitable recommendations to numerous senior citizens. He is not currently employed in the securities industry.
Have You Lost Money Investing with Kyusun Kim?
If you lost money investing with former Independent Financial Group Broker Kyusun Kim or think you may be a victim of stockbroker misconduct, contact an experienced investment fraud attorney today.
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