David Quentin Kendrick of Shreveport, Louisiana submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for allegedly engaging in private transactions in violation of NASD Rule 3040 and FINRA Rules 3270, 3280 and 2010.
From May 2002 until May 2018, David Quentin Kendrick was registered with NYLife as a General Securities Representative. According to FINRA from November 2011 through January 2017, Kendrick engaged in an outside business activity with an investment club and also engaged in 9 separate private securities transactions without notice or approval from his firm. The FINRA findings stated in November 2011, Kendrick became officer and manager of an investment club, TC, but did not disclose his participation to his firm until August 2015. FINRA also stated that NYlife denied approval, and Kendrick continued his business with TC. According to FINRA Kendrick recommended and facilitated investments totaling $290,000 in three private placements and personally invested $106,297 in six different private placements. In addition, FINRA found, Kendrick failed to disclose all of his personal investments away from his firm and made false statements on six annual compliance questionnaires and five branch audit questionnaires concerning his private securities transactions.
FINRA Rule 3270 provides, in relevant part: “No registered person may be an employee, independent contractor, sole proprietor, officer, director or partner of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his or her member firm, unless he or she has provided prior written notice to the member, in such form as specified by the member.” A violation of FINRA Rule 3270 is also a violation of FINRA Rule 2010, which requires associated persons to observe high standards of commercial honor and just and equitable principles of trade.
NASD Rule 3040 and FINRA Rule 3280 prohibit any person associated with a member firm from participating in any private securities transaction without first providing written notice to the member firm with which he or she is associated describing in detail the proposed transaction and the person’s proposed role therein and stating whether he has received or may receive selling compensation in connection with the transaction. A violation of NASD Rule 3040 and FINRA Rule 3280 also constitutes a violation of FINRA Rule 2010.
Without admitting or denying FINRA’s findings, David Quentin Kendrick was assessed a deferred fine of $30,000 and suspended from association with any FINRA member in all capacities for 18 months. The suspension is in effect from December 16, 2019, through June 15, 2021.
Stockbrokers have been known to engage in many practices that may violate industry and firm rules, practices, and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of these industry rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, and the brokerage firm’s own policies and procedures. If broker-dealers and/or their supervisors fail to establish and implement these protective measures, they may be liable to investors for damages which flow from the broker’s misconduct. Therefore, investors who have suffered losses stemming from private transactions, and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like NYLife, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your NYLife account due to private transactions by your broker? Was David Quentin Kendrick your stockbroker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against NYLife stockbrokers who may have engaged in broker misconduct and caused investors’ losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.