In one case included in the latest monthly FINRA roundup, a broker was barred from the industry for a variety of alleged misdeeds, including using client funds for his own purposes and attempting to hide it.
According to FINRA's findings, Kyle Patrick Harrington of San Diego converted about $20,000 in funds from one customer and engaged in undisclosed private securities transactions with several other people, along with making false statements and providing false documents to his employer and to FINRA.
Specifically, FINRA's findings state that in mid-2012, Harrington moved $19,874 of a customer's funds into an account he owned and had his assistant falsify documents to facilitate the transfer.
When regulators began questioning him in 2016 about the event, he asked the client to sign a letter stating she had paid him to stay at his vacation home in 2012, FINRA documents show. (She did not agree.) And although he first told told FINRA the money was because the client rented his vacation house, he later said it was for investment management fees.
The client told FINRA that she thought the money was transferred to her individual retirement account.
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In November 2016, an internal review at Harrington's then-employer, National Securities Corp., revealed the questionable transfer and he was fired, FINRA documents show.
Separately, FINRA took Harrington to task for not disclosing his private dealings in securities, which is required by broker-dealers. Those transactions led to an arbitration claim from one investor that resulted in National paying $105,000 to resolve, according to FINRA documents.
In addition to now being barred from the industry, Harrington was ordered to pay $105,000 to reimburse National for the claim and to pay $190,974 in disgorgement (ill-gotten gains) to FINRA.
Before all this, Harrington already had resigned from another brokerage in 2011 after the firm discovered he had failed to disclose a personal bankruptcy, FINRA documents show. Regulators took action over that omission by suspending him from working with any brokerage for 30 days in 2012.
And, after National fired him in November 2016, he then was hired by Aurora Capital in Bridgehampton, New York, until last year.