The Law Firm of David Chase is reviewing allegations against former Hilo, Hawaii-based First Allied Securities broker John K Kai (CRD#2163244) involving the improper exercise of discretion in client brokerage accounts, unsuitable investment recommendations and engaging in unauthorized outside business activity.
According to FINRA’s BrokerCheck report on Kai, a customer filed a complaint against him while he was employed at Commonwealth Financial Network alleging Kai provided investment advice that was unsuitably risky for the client. The complaint alleges $37,190 in damages. The complaint was later settled for $20,000.
In April 2017, Kai was discharged from First Allied Securities for violating firm policies, including communications with the public, undisclosed private securities transactions, outside business activities, exercising discretion in clients’ accounts and borrowing funds from a client.
Later in June 2017, FINRA permanently barred Kai after he failed to respond to an official FINRA request for information.
Unauthorized trading occurs when a stock broker facilitates a transaction without the permission of the customer in a non-discretionary account. According to FINRA, it is one of the common investor issues along with misrepresentation, cold-calling, and unsuitability.
Unauthorized trading is a serious form of broker misconduct. A broker’s employing firm is responsible for overseeing and supervising the broker to prevent such misconduct. Failure to reasonably supervise is a claim that can be brought against a brokerage firm in FINRA Arbitration in these situations.
Among other basic tenets, a financial advisor is required to recommend suitable investments to their customers. This requires that the broker: investigate and conduct due diligence into the investment’s attributes, including its benefits, risks, tax consequences and other relevant factors to form a reasonable basis for the recommendation of the product. The financial advisor is also obligated to appropriately match the investment with the customer’s specific investment needs and investment objectives, such as the customer’s risk status, retirement status, long or short-term goals, age, disability, income needs, etc.
FINRA arbitration is a fast, efficient way to recover your lost investment funds due to unauthorized trading or unsuitable recommendations made by a stock broker. The Law Firm of David Chase works on a contingency fee basis, meaning you pay it nothing unless it recovers money for you.
If you invested with John K. Kai and First Allied Securities or Commonwealth Financial Network and have lost money doing so, you may be able to recover some or all of your losses. David Chase is experienced in recovering investor losses due to broker / brokerage firm misconduct and mismanagement through FINRA arbitration.
The Law Firm of David Chase represents the interests of investors who have been the victims of investment fraud. If you have questions about your legal rights, please contact David Chase for a free consultation at david@davidchaselaw.com or toll-free at (800) 760-0912.
