Barred Advisor Continues Pattern of Settlements at ÍøÆØ³Ô¹Ïstern International Securities
From the desk of Jim Eccleston at ÍøÆØ³Ô¹Ï
Chris Kennedy, a barred advisor formerly associated with ÍøÆØ³Ô¹Ïstern International Securities, has agreed to a $2.1 million settlement with the Securities and Exchange Commission (SEC) over allegations of high-volume trading, or churning, in client accounts. According to InvestmentNews, the settlement caps a year of increased regulatory scrutiny on former ÍøÆØ³Ô¹Ïstern International Securities advisors following the firm’s acquisition by LPL Financial Holdings through its purchase of the Atria ÍøÆØ³Ô¹Ïalth Solutions network of broker-dealers.
Between July 2020 and July 2021, Kennedy allegedly violated Regulation Best Interest by recommending a short-term, high-volume trading strategy to 19 retail brokerage accounts without a reasonable basis. According to InvestmentNews, the SEC’s complaint indicated this strategy resulted in over $363 million in transactions, leading to customer losses exceeding $9 million.
Kennedy’s case is not the only regulatory issue tied to ÍøÆØ³Ô¹Ïstern International Securities this year. Over the summer, the firm faced approximately $1.7 million in regulatory penalties, including an SEC settlement over Regulation Best Interest violations. That case involved the sale of bonds issued by GWG Holdings, a company that filed for bankruptcy in April 2022. Another former ÍøÆØ³Ô¹Ïstern International advisor was barred by FINRA earlier this year for misappropriating client funds over 17 years, as reported by InvestmentNews.
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