The Financial Industry Regulatory Authority (“FINRA”) has made findings against Kestra Financial Services, LLC of Austin, Texas and censured and fined the firm for overcharging mutual fund investors and for its supervisory failures which allowed the overcharging to occur.
FINRA found that from July 1, 2009 to February 22, 2018, Kestra overcharged certain retirement plan and charitable organization customers that were eligible to purchase Class A mutual fund shares without a front-end sales charge. Rather than selling these customers the Class A shares without a front-end sales charge, Kestra either sold them Class A shares with a front-end sales charge or sold them Class B or C shares with back-end sales charges and higher ongoing fees and expenses.
FINRA likewise found that Kestra failed to establish and maintain a supervisory system and supervisory procedures reasonably designed to ensure that Kestra did not overcharge its mutual fund customers. As a result of those failures, Kestra was found in violation of FINRA’s supervisory rules.
As a result of its violations of FINRA’s rules, Kestra was censured, fined $225,000, and ordered to repay the eligible customers’ over-charges with interest: a total estimated by FINRA at $1,947,704.
Kestra’s FINRA BrokerCheck report shows that, while it has only been in business since 2014, it has already racked up a total of twelve regulatory sanctions against it and lost two arbitration cases based on complaints brought by its customers.
If you or someone you know lost money as a client of Kestra Financial Services, LLC due to unsuitable, misrepresented, or unauthorized transactions, please call the Frankowski Firm at 888.741.7503 or fill out this contact form.