South Florida Financial Advisor Barred For Providing False Information In Connection With FINRA Investigation
Earlier this year, the Financial Industry Regulatory Authority (FINRA) barred broker Kevin Andrew Hobbs (CRD #4267482) from the industry. Mr. Hobbs was a representative of PFS Investments Inc. in Lake Worth, FL from January of 2001 to October of 2022. Mr. Hobbs faced two customer complaints for unsuitable investment recommendations over the last two years—one of which is still pending. He was barred by FINRA for providing an inaccurate response in relation to an investigation into alleged selling away. Here, our Miami selling away investments attorney discusses the findings from FINRA.
Barred Broker: Kevin Andrew Hobbs, Formerly Of PFS Investments Inc.
Following the filing of two investor complaints (one in 2021 and one in 2022), FINRA opened up an investigation into the conduct of Florida broker Kevin James Hobbs. According to FINRA”s findings, Mr. Hobbs provided inaccurate information in response to FINRA’s request for documents and information. The matter was centered on allegations that he traded outside his member firm (selling away) in a customer’s third-party brokerage account. FINRA also alleges that Mr. Hobbs failed to identify at least one individual for whom he conducted securities transactions outside his firm. Finally, investigators determined that this broker participated in multiple private securities transactions without obtaining written approval from his firm. Without admitting or denying any of the specific findings, Mr. Hobbs consented to the penalties.
Two Investor Complaints for Unsuitable Investment Recommendations
Notably, former PFS Investments Inc. financial advisor Kevin Hobbs has recently faced two separate investor complaints for unsuitable investment recommendations. In September of 2021, an investor complaint was filed. It was eventually settled for $375,000. In September of 2022, another unsuitable investment recommendations complaint was filed. That complaint is still listed pending by FINRA. All registered securities brokers have a professional obligation to ensure that they are providing suitable investment guidance to their clients.
Understanding FINRA’s Selling Away Regulations
Selling Away refers to the practice where a broker sells or solicits securities not held or offered by the brokerage firm that they are affiliated with. It is an activity that most often occurs without the knowledge or approval of the firm and can be a potential red flag for fraudulent activity. The Financial Industry Regulatory Authority (FINRA) strictly regulates this practice under Rule 3280.
According to this rule, brokers are required to provide written notice to their firms before participating in any private securities transactions. The notice must detail the proposed transaction and the broker’s role therein. Firms then must endorse the transaction and supervise it as if it were executed within their operations. FINRA Rule 3280 is designed to protect investors by ensuring that all transactions meet the regulatory standards and receive proper oversight from member firms.
Get Help From Our Securities Fraud Lawyer Today
At Carlson & Associates, P.A., our Florida investment fraud lawyers have the professional expertise needed to handle all types of selling away cases. If you have any specific questions or concerns about your legal rights, we are here to help you determine the best course of action. Contact us at our Miami law office today for a fully confidential initial appointment with an attorney.