Phillip Kao Allegedly Recommended Unsuitable Investments
Phillip Kao (CRD #: 4654233), a broker registered with Portsmouth Financial Services, is the subject of an investor dispute. This dispute appears on his BrokerCheck record, accessed on April 25, 2024. Keep reading if you have questions regarding his alleged conduct.
Investor Allegations
On February 29, 2024, an investor alleged that Phillip Kao recommended an unsuitable investment for their objectives and risk tolerance.
What is a Suitable Investment?
FINRA defines suitable investments as securities that fit an investor’s profile. An investor’s profile includes information about their risk tolerance, financial goals, and age.
FINRA Rule 2111 identifies the three prongs of a suitability determination as 1) reasonable-basis suitability, 2) customer-specific suitability, and 3) quantitative suitability.
- Reasonable-basis Suitability: Brokers are required to use reasonable diligence before making a recommendation. This means they have an obligation to understand an investment strategy and its potential risks or rewards.
- Customer-specific Suitability: Before recommending a particular security or investment strategy involving a specific client, brokers are required to have reasonable grounds for believing it will be suitable based on that client’s personal profile. The profile includes information on the investor’s financial goals, investing experience, and risk tolerance.
- Quantitative Suitability: Brokers with control over a customer’s account must have a reasonable basis to believe that the series of transactions they recommend are not excessive before executing them. Excessive transactions run the risk of incurring too many fees and negating any returns.
Investors who rely on their brokers for recommendations may be able to recover their losses through FINRA arbitration.
Background Information
Phillip Kao has passed the following exams:
- Series 63 Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 General Securities Representative Examination
He is a registered broker in California, Colorado, Georgia, and Oregon.
During his 20 years of experience, Phillip Kao has registered with five firms:
- Portsmouth Financial Services (CRD #: 13980)
- Woodbury Financial Services (CRD #: 421)
- LPL Financial (CRD #: 6413)
- Next Financial Group (CRD #: 46214)
- Wamu Investments (CRD #: 599)
Kurta Law Can Help
If you have worked with Phillip Kao and have concerns about your investments, do not hesitate to contact us at 877-600-0098 or email 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 that 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. Do not let securities fraud go unchecked. Start your recovery process today.