August 22, 2025, FINRA issued an AWC, a regulatory settlement, in which fined Joseph Kelly $10,000, suspended him from association with any FINRA member in all capacities for nine months, and ordered to pay $69,830, plus interest to his investors.
Kelly has numerous blemishes on his employment history. This includes a recent tax lien and multiple suits and another threatened suit from one of his investors. His most recent employer is VCS Venture Securities, but most action occurred while representing Spartan Capital.
Without admitting or denying the findings, Kelly consented to the sanctions and to the entry of findings that he willfully violated Reg BI, requiring that brokers act in the best interests of their investors, and violated FINRA Rules 2111 and 2010. Kelly committed these violations by recommending a series of trades that were excessive, unsuitable and not in the customers’ best interest.
The findings stated that some of the customers relied on Kelly’s advice and routinely followed his recommendations, and as a result, Kelly exercised de facto control over their accounts. De facto control over an account is not necessary for a violation but does evidence the severity of the violation. Kelly’s recommendations to the customers generated $365,344 in total commissions and caused $262,683 in total realized losses. The amount of restitution is equal to the total commissions charged to two of the customers as the remaining affected customers previously settled claims with Kelly’s member firm.
Jeffrey Pederson represents investors in cases where brokers fail in their duties. Call to discuss this or other actions of broker misconduct.
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