James Kelly is the subject of a FINRA Suspension
James Kelly (CRD #: 2959343), a broker previously registered with Pruco Securities, was suspended by FINRA, according to his BrokerCheck record, accessed on December 16, 2021.
This suspension stems from allegations that James Kelly engaged in a commission-sharing agreement with a registered representative of another firm without reflecting it on his firm’s books and records.
Regulatory Action
According to an Acceptance, Waiver, and Consent agreement dated October 22, 2021, James Kelly consented to the findings that from 2014 to 2019 he received referrals for 39 customers from a representative who was registered through a Pruco-affiliated firm. These customers purchased 45 variable annuity contracts through James Kelly.
James Kelly allegedly sent the representative checks totaling $118,007.95, which represented about half of James Kelly’s commissions earned for referring the customers. James Kelly allegedly did not disclose to Pruco the commission-sharing agreement with the representative.
FINRA Rule 4511 requires each member to make and preserve books and records in conformity with Section 17(a) of the Exchange Act and Exchange Act Rule 17a-3. A registered representative who falsifies firm records causes the firm to maintain inaccurate books and records in violation of FINRA Rule 4511. A violation of FINRA Rule 4511 constitutes a violation of FINRA Rule 2010, which requires associated persons to observe high standards of commercial honor and just and equitable principles of trade.
You can read a copy of the AWC here.
As part of the terms of the AWC, James Kelly consented to:
- A 2-week suspension ending on December 19, 2021
- A $5,000 fine
Employment Termination Details
On December 9, 2019, Pruco Securities fired James Kelly following allegations that he paid compensation to a registered representative of an affiliated broker-dealer for customer referrals that resulted in variable annuity sales, in violation of firm policy.
Misrepresentation Allegations
On March 23, 2020, an investor alleged that James Kelly did not fully disclose all the facts regarding Guarantees and Risks.
James Kelly was involved in a similar dispute on October 22, 2012. According to the allegations, he did not disclose all the facts concerning a 1035 exchange during the purchase of a Transamerican contract.
A financial advisor who recommends an investment is subject to ethical standards enforced by law. Such laws include:
- FINRA Rule 2111 requires registered financial advisors to have a “reasonable basis” to believe that a recommended transaction or investment strategy suits their client’s needs.
- FINRA Rule 2020 prohibits brokerage firms and stockbrokers from making material misrepresentations or inducing people into buying investments with false statements about their potential benefits.
- James Kelly’s alleged unethical conduct also violates FINRA Rule 2010, which states that brokers must uphold high standards of commercial honor.
Investors who rely on their brokers for recommendations may be able to recover their losses through FINRA arbitration if their broker recommends an unsuitable investment.
Both cases were denied. Investors should know that they can still pursue FINRA arbitration and recover their losses following a denial.
Background Information
James Kelly has passed the following exams:
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 6 – Investment Company Products/Variable Contracts Representative Examination
James Kelly has also worked with:
- PFS Investments. (CRD#:10111)
Kurta Law Can Help
If you have been victimized after working with James Kelly, don’t hesitate to contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf. Please feel free to reach out to Kurta Law for advice on how to recover investment losses.