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Harrington has been alleged to have committed several forms of deceit in his dealings with investors and regulators in the last eight years. This includes actions while employed at National Securities (NSC), Bannockburn Partners, Matrix Captial, First Allied, and Robert B. Ausdall. He is currently a representative of Aurora Capital and also operates under the name of Harrington Capital Management. Responsibility for the actions of Harrington fall not just on Harrington, but also on his employers.
The types of deceit alleged over the years include churning, creating of falsified documents, theft of investor funds, unsuitable investments, excessive trading, unauthorized purchases made in investor accounts, and other forms of misrepresentations and fraud.
Of all the allegations of deceit, the most recent is a civil suit filed by FINRA. The FINRA suit involves a series of alleged deceptions by Kyle Harrington with the help of his assistant, Linda Milberger, to conceal Harrington’s alleged theft of customer funds and private securities transactions, securities transactions done outside of his firms’ fraud monitoring to put his investors in questionable investments.
Harrington is also alleged to have created false documents to submit to FINRA to conceal his misconduct not just from his employers, but also from regulators. For her part, Milberger falsified wire request forms which allowed Harrington’s conversion of customer funds, submitted those falsified wire request forms to her firm and another brokerage as if they were authentic records, and knowingly assisted Harrington in providing an altered bank statement to regulators.
In particular, in August 2012, Harrington convinced an investor to authorize a wire transfer to Harrington’s registered investment advisor firm for a purported investment. In fact, after the investor’s funds were wired to Harrington’s business checking account, Harrington took the investor’s funds without her knowledge or consent, and used it to pay his own business expenses.
When difficulties arose completing the $20,000 wire transfer from the investor’s account in August 2012, Harrington’s assistant, Milberger, altered the wire request form that the investor had signed without the investor’s knowledge or consent, on at least two occasions, in order to transfer all available cash out ofLD’s account to Harrington. Milberger submitted the altered wire request forms to her own firm and another broker dealer as iftheywere authentic, thereby causing those firms to maintain inaccurate books and records regarding the wire transfer.
In August 2012 and early 2013, Harrington also engaged in a series of private securities transactions with multiple individuals through which he sold over 300,000 shares of restricted stock he had purportedly received as compensation from a company named Islet Sciences, Inc. for approximately $276,000. Harrington failed to disclose these transactions, including his role as seller of the securities, to his employing firm or seek its prior approval of them.
Harrington not only failed to disclose his private securities transactions in Islet but he actively attempted to conceal them. Specifically, in July 2014, during a firm audit of his business, Harrington submitted falsified records to his firm mischaracterizing payments he had received for the sale of his Islet stock.
Additionally, Harrington has been the subject of nine actual or threatened investor lawsuits, multiple other regulatory investigations and employment terminations. This information is contained in the CRD of Harrington.