SEC Orders Thomas Kahn to Cease and Desist

Thomas Kahn (CRD #: 263171), a broker registered with Kahn Brothers, was involved in a recent SEC action, according to his BrokerCheck record, accessed on July 30, 2022. Investors may also have engaged his services through Kahn Brothers Advisors. Keep reading to learn more about Thomas Kahn’s conduct as a broker.

SEC Regulatory Action

On June 6, 2022, the Securities and Exchange Commission entered cease-and-desist proceedings against Thomas Kahn and Kahn Brothers Advisors. The SEC alleged that, as principal owner and president of Kahn Brothers Advisors, Thomas Kahn made misstatements and omissions to current and prospective clients regarding brokerage services offered by the firm’s affiliated broker-dealer, Kahn Brothers.

The SEC alleged that Thomas Kahn and Kahn Brothers Advisors committed the following violations:

• Failed to fully and fairly disclose material facts concerning the conflict of interest arising from the use of an affiliated broker-dealer to execute client transactions.
• Made misleading statements to current/prospective clients that Kahn Brothers Advisors would aggregate client transactions to reduce commissions.
• Failed to seek best execution for clients and failed to conduct a best execution review of the firm.
• Failed to establish and implement written policies and procedures to reasonably prevent violations of the Investment Advisers Act of 1940.

Thomas Kahn was allegedly responsible for all aspects of Kahn Brothers Advisors’ compliance program, its implementation, and the firm’s disclosure obligations.

The SEC alleged that Thomas Kahn willfully violated Section 206(2) of the Investment Advisers Act, and caused Kahn Brothers Advisors’ willful violations of Section 206(4) of the Investment Advisers Act and Rule 206(4)-7 thereunder.

The Investment Advisers Act

Section 206 of the Investment Advisers Act bans investment advisers from using deceptive and manipulative schemes or tactics to defraud clients.

Under Rule 206(4)-7, investment advisers must adopt and enforce policies and procedures designed to prevent violations of the Investment Advisers Act, conduct annual reviews of the effectiveness of these policies and procedures, and designate a chief compliance officer.

Sanctions

Thomas Kahn faced the following sanctions:

• Censure
• $250,000 fine
• $701,799 disgorgement
• $146,100 prejudgment interest

Background Information

Thomas Kahn has passed the following exams:

• Series 65 – Uniform Investment Adviser Law Examination
• Series 63 – Uniform Securities Agent State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 55 – Limited Representative-Equity Trader Exam
• Series 16 – NYSE Supervisory Analyst Examination
• Series 41 – NYSE Allied Member Examination
• Series 1 – Registered Representative Examination
• Series 000 – General Securities Principal Examination
• Series 14 – Compliance Officer Examination
• Series 4 – Registered Options Principal Examination
• F04 – Financial Principal Examination
• Series 40 – Registered Principal Examination 

Thomas Kahn is a registered broker in 29 states and the District of Columbia. He is also a registered investment adviser in Texas.

He has also worked for the following firms:

• Kahn Brothers Advisors (CRD#:7720)
• Lehman Brothers Kuhn Loeb (CRD#:7555)
• Lehman Brothers (CRD#:514)
• Abraham & Company (CRD#:1000001)

Kurta Law Can Help

If you worked with Thomas Kahn and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want 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.