Securities Lawyers Blog
According to BrokerCheck records financial advisor John Spach (Spach), formerly employed by Kestra Investment Services, LLC (Kestra) has been subject to at least one customer complaint, one regulatory action, and one employment termination for cause. According to records kept by The Financial Industry Regulatory Authority (FINRA), Spach’s customer complaint alleges that Spach introduced a client of his independent advisory firm to an outside investor. The client allegedly invested $475,000 and received a promissory note that defaulted.
Thereafter, in July 2018 NFP Retirement Inc. (NFP) discharged Spach claiming violations of the Investment Advisers Act of 1940 including co-mingling client assets with his own personal assets, breach of fiduciary duty, unsuitable investment advice, material misstatements, failure to disclose material conflicts of interest, circumvention of compliance policies and procedures, and affirmative misrepresentations to the firm.
Finally, in February 2019 FINRA sanctioned Spach alleging Spach consented to the sanction and findings that he refused to produce documents and information requested by FINRA in connection with its investigation into potential violations relating to a customer complaint. FINRA found that his former firm disclosed that he had been permitted to resign while under internal review relating to the potential violation of various firm policies while attempting to settle a customer complaint with a client of his registered investment advisor.
At this time it is unclear the full extent and scope of Spach’s activities. His public disclosures list several outside business activities including Gen X for America, ibotit, and ERISA Smart. It is unclear whether the allegations involve any of these disclosed activities.
Brokerage firms are obligated under the FINRA rules to properly monitor and supervise their employees in order to detect and prevent brokers from violating the securities laws. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including theft of funds and other frauds.
Spach entered the securities industry in 1996. From May 2007 until July 2014 Spach was associated with Financial Telesis Inc. From August 2014 until June 2018 Spach was associated with Kestra out of the firm’s Aliso Viejo, California 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.