Tr?id=566623520170033&ev=PageView&noscript=1

ÍøÆØ³Ô¹Ï

FINRA Sanctions Advisor for Accepting $1 Million Inheritance from Client Without Firm Approval

Posted on June 27th, 2025 at 12:18 PM
FINRA Sanctions Advisor for Accepting $1 Million Inheritance from Client Without Firm Approval

From the desk of Jim Eccleston at ÍøÆØ³Ô¹Ï

FINRA has fined and suspended veteran advisor Kenneth J. Malm for accepting a $1 million inheritance from a client without receiving the necessary firm approval. As reported by the DI Wire, Malm settled the matter without admitting or denying FINRA’s findings.

According to the FINRA Acceptance, Waiver and Consent (“AWC”), Malm learned he had been named a beneficiary of a client’s estate after her passing in 2021. Rather than notifying Securities America and seeking written approval, as required under FINRA Rule 3241, Malm accepted the inheritance. Rule 3241 prohibits advisors from being named as beneficiaries for non-family clients’ estates without firm consent.

FINRA also charged Malm with violating its broad ethical standard, Rule 2010, which requires registered representatives to act with high standards of commercial honor and just and equitable principles of trade. DI Wire reports that the regulator opened its investigation following a tip to its senior helpline.

The settlement imposes a $10,000 fine and a seven-month suspension from associating with any FINRA member firm in all capacities. DI Wire reports that similar cases have surfaced in recent years. Notably, a former ÍøÆØ³Ô¹Ïlls Fargo advisor retired in December 2023 amid a FINRA inquiry into a $3 million client gift arrangement.

 

ÍøÆØ³Ô¹Ï LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

Thank You from the bottom of our hearts for all you have done for us. When we realized this was a very bad investment - we did not know where to turn for help. Then we received your name. When we called you - you were so kind to us and then agreed to help us. For this we are so very grateful. The world would be a much nicer place if there were more people like the two of you in it. ÍøÆØ³Ô¹Ï will always remember all the help and kindness you have shown us. Thank you so very very much for everything.

Wayne and Judy S.

LATEST NEWS AND ARTICLES

1783615970 Law
July 9, 2026
FINRA Suspends Former Branch Manager for Supervisory Failures Linked to Excessive Trading and Churning

A former regional branch manager at a broker-dealer has agreed to Financial Industry Regulatory Authority (FINRA) sanctions after the regulator found that he failed to supervise registered representatives who engaged in excessive trading and churning of customer accounts.

1783525964 Law
July 8, 2026
SEC Sanctions David Lerner Associates for Regulation Best Interest Violations

David Lerner Associates has agreed to settle Securities and Exchange (SEC) charges alleging violations of Regulation Best Interest (Reg BI) that resulted in unnecessary costs to retail investors, according to InvestmentNews.

1783434190 Law
July 7, 2026
Private Credit Funds Face Mounting Redemption Pressure as Investor Sentiment Shifts

A surge in investor redemption requests has intensified pressure on private credit funds, raising concerns about liquidity and long-term stability across the asset class, as reported by The Wall Street Journal.