Welcome to Financial Advisor IQ
Follow

Finra Bars Broker over Unsuitable Recommendations to Seniors

By Alex Padalka June 29, 2018

Finra has barred a broker for making unsuitable recommendations to senior clients over the course of seven years, according to a letter of acceptance, waiver and consent from the industry’s self-regulator.

From 2008 to 2015, Kyusun Kim (also known as "Kenny" Kim), while registered with Independent Financial Group, recommended that customers who were retired or getting close to retiring invest in alternative investments such as non-traded real estate investment trusts and structure notes, Finra alleges.

Many of the clients he recommended these instruments to were unsophisticated investors with little experience outside their 401(k) and pension plans and with no experience buying alternative investments, according to the letter of consent.

Finra further alleges the “speculative and illiquid nature” of the REITs and notes — which the regulator says Kim never disclosed to his clients — were inconsistent with the goals and risk profiles of those customers, according to the letter.

In some cases investments in these products were highly concentrated: in one case, a 71-year-old customer had 75% of his liquid net worth tied up in non-traded REITs and notes, according to Finra. What’s more, Kim allegedly falsified account records and client profiles for some of the customers in order to bypass IFG’s internal policies about account concentrations in alternative investments, the regulator says.

Kim joined the securities industry in 1997 and registered with IFG in 2006, according to his BrokerCheck profile.

He left the firm in March 2016 to join Sandlapper Securities, where he stayed until April this year, according to his profile. Kim hasn’t registered with another firm since then. The barred broker has 24 disclosures on his 19-year record, and all but this week’s Finra bar are customer disputes, starting with one dating back to 2007 in which the client alleged that Kim had forged signatures in 1999, according to BrokerCheck.