Please call if you were an investor with Christopher Booth Kennedy. Western International Securities employed Kennedy for most of the period between 2017 through September of 2021, while briefly working for Spartan Capital
A FINRA regulatory action identified the wrongdoing of Kennedy. Between July 2020 and July 2021, Respondent Christopher Kennedy churned and excessively traded four accounts of six customers as a broker for Western International Securities.
There may be a considerable number of additional victims. The regulatory complaint does not preclude the fact that many more victims may exist.
Churning is the act of a broker making excessive or unsuitable trades. A broker churns an accounts more for the broker’s personal benefit than for the benefit of the investor or recklessly disregards the interests of the investor.
Control over an account can indicate that excessive trades are the result of a broker’s inappropriate intent. Kennedy used his control over these accounts to direct an excessive series of trades in each account that generated commissions for his own benefit at the customers’ expense.
Between July 2020 and July 2021, Kennedy directed over 5,300 trades representing net trading of more than $350 million in the four accounts of six accounts . Once again, this is just for the accounts in the regulatory complaint. Many more inappropriate trades may exist. Each month, Kennedy made an average of 102 trades per account identified in the regulatory action representing net trading of more than $6.9 million per account or approximately 13 times the average account value.
Kennedy’s trading in just the six accounts resulted in annualized cost-to-equity ratios ranging from 27% to 39% for an average cost-to-equity ratio of more than 31% across all their accounts. This means that the accounts needed to achieve a return of up to 31% each year just to make a profit due to commissions and costs.
As the result of Kennedy’s excessive trading, the six accounts identified collectively lost over $2.3 million in value and paid more than $715,000 in trading costs, including over $595,000 in commissions to Kennedy and his employer.
Moreover, in March 2021, Kennedy began making fake Wester International account statements to hide the results of his trading. Over the next six months, Kennedy prepared and sent six fake account statements inflating their account value.