Securities Lawyers Blog
The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that Kenneth Hutkin, currently employed by Wedbush Securities Inc., (Wedbush) has been subject to at least five customer complaints during his career. According to records kept by the Financial Industry Regulatory Authority (FINRA), Hutkin’s customer complaints allege that Hutkin recommended unsuitable investments, engaged in churning, overcharged certain corporate security debts, and engaged in unapproved outside business practices.
In February 2020, a customer complained that Hutkin violated the securities laws by alleging that Hutkin engaged in unsuitable investment advice. The claim does not specify any amount with respect to damages. However, the complaint was denied.
In September 2018, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unapproved outside business activities, including payments for some such activities. Hutkin was terminated by his employer, Morgan Stanley, for these allegations.
In October 2008, a customer complained that Hutkin violated securities laws by alleging that Hutkin overcharged certain corporate debt securities. The claim settled in the amount of $52,958.
In June 1993, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unsuitable investment advice and churning. The claim settled in the amount of $23,000.
In June 1992, a customer complained that Hutkin violated securities laws by alleging that Hutkin engaged in unsuitable investment advice and churning. The claim settled in the amount of $130,000.
Brokers are required under the securities laws to treat their clients fairly. This obligation includes the duties to disclose material risks of the investments they recommend and to present products, particularly complex or confusing products, in a fair and balanced manner that allows the client to evaluate the recommendation. Another important obligation advisors have is to make only suitable recommendations for investments to the client. There are many investments that are not appropriate for most investors or for certain investors given their risk tolerance, age, and other factors. Advisors should not present these investment options to clients. There are two screens that advisors must employ to determine whether an investment is suitable for a client. First, there must be a reasonable basis for the recommendation – meaning that the product has been investigated and due diligence conducted into the investment’s features, benefits, risks, and other relevant factors. The advisor must conclude that the investment is suitable for at least some investors and some securities may be suitable for no one. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short-term goals, age, disability, income needs, or any other relevant factor.
According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases. In addition, research has shown a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints. These lower quality firms may average brokers with five times as many complaints as the industry average.
Hutkin entered the securities industry 1985. From June 1985 through December 1985, Hutkin was registered with Weaver Johnson & Company, Inc. From November 1985 through December 1987, Hutkin was registered with Hamilton, Grant & Company, Inc. From October 1987 through September 1993, Hutkin was registered with Oppenheimer & Co., Inc. From April 1994 through June 1994, Hutkin was registered with Beacon Securities, Inc. From July 1994 through August 1994, Hutkin was registered with Thomas James Associates, Inc. From September 1997 through December 2008, Hutkin was registered with First Montauk Securities Corporation. From December 2008 through September 2010, Hutkin was registered with First Allied Securities, Inc. From September 2010 through October 2018, Hutkin was registered with Morgan Stanley. Hutkin is currently associated with with Wedbush Securities Inc. out of their New York, New York office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.