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FINRA Arbitration Panel In Florida Holds Financial Advisor Liable For Breach Of Fiduciary Duty

Kevin M. McNeil (CRD#: 4166684) is a previously registered securities broker. Mr. McNeil has previously been associated with several brokerage firms in South Florida, including SW Financial (2019 to 2020), Dawson James Securities (2018 to 2019), Westpark Capital, INC (2016 to 2018), and Newport Coast Securities, INC (2015 to 2016).

On June 23rd, 2022, a Financial Industry Regulatory Authority (FINRA) arbitration panel in Boca Raton found Mr. McNeil liable for $15,000 of compensatory damages for investor losses (Case Number: 20-00205). Here, our Miami investment fraud lawyer provides a more detailed explanation of the decision.

FINRA Arbitration Award: Compensatory Damages for Breach of Fiduciary Duty 

In their Statement of Claim, the investors, a husband and wife couple, named former Florida broker Kevin M. McNeil, WestPark Capital, Inc., and Dawson James Securities, Inc. as respondents. The claimants raised several different specific causes of action against the financial professional and two of his former member firms. Specifically, they argued for damages based on:

  • Breach of fiduciary duty;
  • Unsuitable investment recommendations;
  • Violation of federal securities law;
  • Violation of Florida securities law; and
  • Negligent supervision.

The specific issue in question was the allegations that Mr. McNeil churned their account—made an unsuitably high number of trades, based on cost-to-equity ratio and the turnover rate. Upon evaluation, the FINRA arbitration panel determined that neither WestPark Capital, Inc. nor Dawson James Securities, Inc. were liable. However, it held Mr. McNeil liable for $15,000 in damages.

Prior Complaint Against Former Florida Broker Kevin M. McNeil 

Notably, former WestPark Capital, Inc. and Dawson James Securities, Inc. broker Kevin M. McNeil previously settled a similar complaint in January of 2020. According to information obtained through FINRA Brokercheck, Mr. McNeil agreed to settle allegations of unsuitable investment recommendations on the grounds of churning for $14,995. The broker did not admit or deny any wrongdoing as part of the settlement agreement.

Brokers have a professional responsibility to offer suitable investment guidance. The failure to do so may constitute a violation of FINRA Rule 2111. Churning is an example of quantitative unsuitable investment advice. A broker commits churning when he or she makes (or recommends) trades that are so frequent and/or that carry such high fees that it makes it nearly impossible for the investor not to lose money as part of the investment strategy. As broker’s that churn accounts often receive commissions for trades, the effect of the strategy is to transfer money from the investor to the advisor.

Call Our South Florida FINRA Arbitration Attorney for Help

At ​Carlson & Associates, P.A., our South Florida investor rights attorney has the professional skills and legal knowledge to represent clients in FINRA arbitration proceedings. If you sustained financial losses because of a registered investment adviser’s breach of fiduciary duty, we can help. Call us today to set up a strictly confidential initial review of your case. Our firm represents investors in South Florida and communities beyond.

Sources:

finra.org/sites/default/files/aao_documents/20-00205.pdf

brokercheck.finra.org/individual/summary/4166684

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