Written by The White Law Group• December 11, 2024• 4:22 pm• Broker Investigations

Broker Christopher Kennedy Charged with Defrauding Investors

Christopher Kennedy Allegedly Churned Customers Accounts featured by top securities fraud attorneys, the White Law Group

SEC Charges Christopher Kennedy, Western International Broker with Securities Fraud

The White Law Group continues to investigate potential securities claims involving Christopher Kennedy and Western International Securities. If you have suffered investment losses with Christopher Kennedy, the securities attorneys at The White Law Group may be able to help you.

According to a litigation release on December 10th, the SEC has filed a civil injunctive action against former broker Christopher Booth Kennedy (CRD#: 4498061) for securities law violations that reportedly caused significant financial losses for his clients. Kennedy, who reportedly worked at Western International Securities Inc., reportedly engaged in fraudulent practices, including allegation of making false statements about his trading strategy and reportedly issuing falsified account statements that inflated account values.

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The SEC also alleges that Kennedy violated Regulation Best Interest by recommending an unsuitable short-term, high-volume trading strategy for 19 retail customer accounts, leading to over $363 million in transactions and $9 million in customer losses.

Christopher Kennedy to pay $2.1 Million to Settle Charges

Kennedy agreed to settle the charges, paying more than $2.1 million, including disgorgement, prejudgment interest, and a civil penalty. The complaint, filed in the U.S. District Court for the Central District of California, charges Kennedy with violating key antifraud provisions of federal securities laws and Regulation BI. Western International Securities Inc., based in Pasadena, California, manages approximately $2.7 billion in regulatory assets.

FINRA Bars Christopher Kennedy after Allegations of Churning

In May 2024, FINRA, the self-regulator that oversees brokers and brokerage firms, reportedly barred Kennedy from the securities industry, according to a letter of acceptance.

Kennedy reportedly agreed to the sanctions and to the entry of findings that he churned and excessively traded 4 accounts of 6 customers as a registered representative of his member firm, Western International Securities.

Kennedy reportedly has 11 customer complaints filed against him, according to FINRA. Western International reportedly discharged Kennedy in August 2021 after allegations of “unauthorized options trading and failure to adhere to discretionary options sales orders.”

Excessive Trading in Customer Accounts

Kennedy allegedly excessively traded customer accounts to generate commissions for his own benefit at the customers’ expense.

According to FINRA’s findings, Kennedy allegedly made an average of 102 trades per account per month representing net trading of more than $6.9 million per account or approximately 13 times the average account value.

Kennedy’s customers allegedly lost over $2.3 million in value from their accounts and the customers reportedly paid more than $715,000 in total trading costs and margin interest, including over $595,000 in commissions, according to FINRA.

Churning Accounts to Generate Commissions

Churning occurs when a broker makes an excessive number of trades within a client’s account, primarily for the purpose of generating commissions or fees for themselves.

These trades are typically unnecessary and serve no legitimate investment purpose. Instead, they are intended to generate income for the broker, often at the expense of the client. Churning can be costly due to transaction costs and capital losses due to the frequent trading.

Excessive trading and churning violate securities laws and regulations because it breaches the fiduciary duty that brokers and advisors owe to their clients. They are expected to act in the best interests of the client and not engage in trading solely to benefit themselves.

FINRA BrokerCheck Report – Christopher Kennedy

According to this FINRA BrokerCheck report, Christopher Kennedy was affiliated with the following firms during his career, among others:

12/02/2019 – 09/27/2021, WESTERN INTERNATIONAL SECURITIES, INC. (CRD#:39262), Woodland Hills, CA, B, 07/10/2019 – 12/23/2019, SPARTAN CAPITAL SECURITIES, LLC (CRD#:146251), NEW YORK, NY B, 08/21/2017 – 07/10/2019, WESTERN INTERNATIONAL SECURITIES, INC. (CRD#:39262), Tarzana, CA B, 01/27/2009 – 08/21/2017, FINANCIAL WEST GROUP (CRD#:16668) FINRA expelled the firm on 02/13/2020, Tarzana, CA

The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA. Investors can use the tool to verify if a broker or brokerage firm is registered with FINRA, review their employment history, licensing status, and any regulatory actions or complaints filed against them.

How to Recover your Investment Losses

If you have suffered losses investing with Christopher Kennedy and Western International Securities, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.

With over 30 years of securities law experience, The White Law Group has the expertise to help investors to recover their fraud losses.