Kevin McCallum: Lawsuit Investigation

Kevin McCallum, Former LPL Advisor Investigation Update

The White Law Group continues to investigate potential securities lawsuits involving financial advisor Kevin McCallum and the liability his employers may have for failure to properly supervise him. 

May 17th, 2024: The Alabama Securities Commission (ASC) reportedly barred former LPL Financial advisor Kevin Marshall McCallum (CRD#: 2222586) from working as a broker in the state of Alabama after he allegedly violated Commission Rule 830-X-3.12 when he “overconcentrated clients’ accounts in the BDC when it was not suitable for the clients.”

FINRA Suspends Kevin McCallum for one year

June 17th, 2021: The Financial Industry Regulatory Authority (FINRA) reportedly suspended McCallum for one year and reportedly ordered him to pay a fine of $25,000.00, disgorgement of $14,231.61 and restitution of $1,222,092.29.

McCallum allegedly made unsuitable recommendations to 12 customers, resulting in their overconcentration in a high-risk, publicly-traded business development company (BDC). According to his broker record, McCallum reportedly has five customer lawsuits filed against him, three of which allege unsuitable investments in business development company Medley Capital Corporation (MCC).

The BDC that McCallum allegedly recommended held first and second lien secured loans, unsecured loans, and equity in small and medium-sized companies in a variety of industries, including construction, banking, telecommunications, pharmaceutical, and oil and gas companies. The risk of loss for investments in this BDC was purportedly magnified because it borrowed money.

Unsuitable Investments Recommendations

McCallum’s alleged recommendations resulted in the 12 customers concentrating as much as approximately 17% to over 60% in their liquid net worth in the BDC. Four of the customers were reportedly over the age of 60 and seven of the customers invested retirement funds in the BDC, according to FINRA. 

McCallum reportedly sent emails and made statements to customers about the BDC that contained “unwarranted and exaggerated claims, opinions and forecasts, did not provide a fair and balanced treatment of the risks and benefits of the investment, and contained promissory statements,” according to FINRA. 

While McCallum purportedly received $14,231.61 in commissions for the BDC sales, four customers allegedly sold their positions and realized losses totaling $1,222,092.29.

Kevin McCallum: FINRA BrokerCheck

Kevin McCallum was reportedly affiliated with the following firms during his career in the securities industry, among others

 05/24/2012 – 07/05/2019, LPL FINANCIAL LLC (CRD#:6413), BIRMINGHAM, AL

10/30/2009 – 05/23/2012, NBC SECURITIES, INC, (CRD#:17870), BIRMINGHAM, AL

Lawsuit Options: FINRA Arbitration vs. Class Action

Investors considering legal action may wonder whether a class action lawsuit or an individual FINRA arbitration claim is the better option. Typically:

• FINRA Arbitration is often more suitable for investors with losses exceeding $100,000.
• Class Action Lawsuits are usually pursued when numerous investors have small claims that are impractical to litigate individually.

FINRA Lawsuits to Recover Financial Losses

When brokers abuse client accounts or conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

Help for Investors

If you suffered investment losses with Kevin McCallum, the attorneys at The White Law Group may be able to help you by filing a FINRA Arbitration claim against his former employers. 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 with offices in Chicago, Illinois.