SEC v. Christopher Booth Kennedy — U.S. Securities and Exchange Commission Litigation Release No. 26191, dated December 10, 2024.
The SEC charged former broker Christopher Booth Kennedy with fraud and violating Regulation Best Interest. Kennedy allegedly made false statements about trading strategy success and sent falsified account statements. He also recommended a high-volume trading strategy without a reasonable basis, causing millions in customer losses. Kennedy has agreed to a settlement including disgorgement, prejudgment interest, and a civil penalty.
Imagine a financial advisor who told clients their investments were doing great, even showing them fake reports that made it look like they had way more money than they did. This advisor also pushed clients into making lots of quick trades, which ended up losing them a lot of money. Now, the government is stepping in to hold the advisor accountable for these misleading actions and the losses they caused.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
The Securities and Exchange Commission filed a civil injunctive action against former broker Christopher Booth Kennedy for securities law violations that resulted in millions of dollars of losses for his former brokerage customers. According to the SEC's complaint, between February 2021 and July 2021, Kennedy, who formerly worked as a registered representative at Western International Securities, Inc., made false and misleading statements to his customers regarding the value and success of his trading strategy. The SEC alleges that Kennedy's fraudulent conduct included sending one customer falsified account statements that grossly overstated the value of the customer's account. The complaint further alleges that between July 2020 and July 2021, Kennedy also violated Reg Best Interest by recommending a short-term, high-volume investment strategy in 19 brokerage retail customer accounts without a reasonable basis for doing so. The SEC alleges that Kennedy's recommendations resulted in more than $363 million in total transactions spread through the 19 accounts, ultimately resulting in over $9 million in customer losses. The SEC's complaint, filed in the U.S. District Court for the Central District of California, charges Kennedy with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, and Section 10(b) and Rule 10b-5 thereunder of the Securities and Exchange Act of 1934, as well as Regulation Best Interest, Rule 15l-1(a) of the Exchange Act. Kennedy has agreed to settle the above charges, by consenting to the entry of an injunction, agreeing to pay $958,134 in disgorgement with $218,267 in prejudgment interest and a $958,134 civil penalty. The SEC's investigation was conducted by David Rosen and supervised by Marc Blau. The SEC acknowledges the assistance of FINRA, which also brought charges against Kennedy related to this conduct.
Named in this action: Christopher Booth Kennedy.