National investment loss lawyers KlaymanToskes reports Kevin Carroll (CRD# 3124942) of Gateway Financial Partners has been suspended from acting as a broker or associating with a broker-dealer firm by the Financial Industry Regulatory Authority (“FINRA”) due to allegations of borrowing client funds with firm approval and exercising discretion without written authorization.
According to FINRA BrokerCheck, Kevin Joseph Carroll was previously registered with LPL Financial from 2019 to 2021 and with Buell Securities from 2021 to 2022 in Glastonbury, CT. Carroll was also doing business as Gateway Financial Partners.
Investors that suffered losses with Kevin Carroll may be entitled to a financial recovery. Contact Lawrence L. Klayman, Esq. immediately at (888) 997-9956 or lawrence@klaymantoskes.com to discuss your recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
FINRA’s Department of Enforcement entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) with Kevin Carroll on September 5, 2023, disclosing that he consented to sanctions of a four-month suspension from associating with any FINRA member in all capacities, and a $10,000 fine.
According to the AWC, the matter originated from FINRA’s examination of a Form U5 filed by LPL Financial which disclosed that Carroll was terminated “after the “[r]eceipt of verbal customer grievances alleging lack of responsiveness and questioning transactions.” FINRA’s Form U5 is the “Uniform Termination Notice for Securities Industry Registration,” used by brokerage firms each time one of their registered employees leaves the firm, for any reason.
FINRA’s investigation found that In June 2021, Carroll disclosed to his supervisor that he intended to borrow money from one of his friends who was also his customer at LPL. Carroll’s supervisor allegedly informed him that he would not be permitted to borrow money from the customer. Despite this instruction from his supervisor, Carroll borrowed $31,170 from the customer, which was documented by a promissory note.
In addition, the AWC states that Carroll exercised discretion in his customers’ accounts without written authorization. FINRA found that From March 2021 to July 2021, Carroll exercised discretionary authority in two customer accounts involving at least seven UIT transactions, without the clients’ authorization. In many instances Carroll allegedly “used the proceeds from a maturing UIT to purchase a new UIT.”
Under FINRA Rule 3260(b), no registered representative “shall exercise any discretionary power in a customer’s account” without prior written authorization by the customer and written acceptance by the member.
When financial advisors have received written “discretionary” authorization, they must not misuse or exceed that authority by engaging in excessive trading, churning, or recommending unsuitable investment strategies. Excessive transactions could be deemed a breach of fiduciary duty and a FINRA sales practice violation, exposing the brokerage firm and its representative to liability for unauthorized trading or other misconduct.
A violation of Rule 3260(b) is also a violation of FINRA Rule 2010, which requires brokerage firms and their registered representatives to “observe high standards of commercial honor and just and equitable principles of trade.”
Customers of Kevin Carroll that suffered losses at Gateway Financial Partners, Buell Securities, or LPL Financial, are encouraged to contact our firm immediately to discuss recovery options at 888-997-9956 or on the web at www.klaymantoskes.com.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lawrence@klaymantoskes.com
www.klaymantoskes.com