Kovack Securities Inc. (“Kovack Securities”) (CRD#44848) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Kovack Securities, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
If you’ve suffered investment losses at Kovack Securities, you have legal options. Many investors don’t realize they can pursue claims through FINRA arbitration even if they signed an arbitration agreement. The Law Offices of Robert Wayne Pearce, P.A. has extensive experience recovering losses for investors harmed by broker misconduct at firms like Kovack Securities.
If you believe you have a claim against Kovack Securities, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations.
Can I Sue Kovack Securities Inc.?
Yes, you can sue Kovack Securities, but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has extensive experience in FINRA arbitration proceedings and knows very well how you can not only sue Kovack Securities in FINRA arbitration proceedings, but WIN that arbitration.
How to Sue Kovack Securities for Investment Losses
What Can I Do If I Lost Money at Kovack Securities?
If you lost money at Kovack Securities, you can file a claim through FINRA arbitration—a process specifically designed for resolving investment disputes. Most brokerage agreements include mandatory arbitration clauses, which means your dispute will be heard by a panel of arbitrators rather than a judge or jury. This process is often faster and more cost-effective than traditional litigation.
Kovack Securities has documented regulatory problems, including FINRA sanctions for failing to apply proper sales charge discounts and inadequate supervision of its representatives. These systemic failures often lead to investor harm through unsuitable investment recommendations, excessive fees, misrepresentations, and other forms of misconduct. If your losses resulted from such practices, you may have grounds for a claim.
The arbitration process begins with filing a Statement of Claim that outlines your losses and the misconduct that caused them. Evidence such as account statements, correspondence with your broker, and records of trades will support your case. FINRA arbitration is legally binding, and successful claimants can recover their investment losses plus damages.
Even if you signed an arbitration agreement, you can still pursue justice. The key is having experienced legal representation that understands FINRA rules, the independent broker-dealer business model, and the specific regulatory violations that plague firms like Kovack Securities. Acting quickly is essential because arbitration claims have time limits.
Who Can Help Me Sue Kovack Securities?
The Law Offices of Robert Wayne Pearce, P.A. specializes in representing investors who have been harmed by broker misconduct at firms like Kovack Securities. Our firm has handled numerous cases involving independent broker-dealers with similar supervision failures and compliance issues. We understand how these firms operate, where their vulnerabilities lie, and how to build compelling arbitration cases that hold them accountable for investor losses.
What is Kovack Securities Inc.?
Kovack Securities (CRD#44848) has been registered with the SEC and FINRA as a broker dealer since 1998 the company is controlled by the Kovack Family and headquartered in Ft. Lauderdale Florida with small branch offices located throughout the United States. Its independent broker-dealer Business Model has grown through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 150 Kovack Securities branch offices with over 260 registered representatives in every state. It is now one of the 50 largest independent broker-dealer and investment advisory firms in the United States.
Why Does Kovack Securities Inc. Have So Many Bad Reviews And Customer Complaints?
Independent broker-dealers like Kovack Securities are known for weak supervision of their financial advisors. Unlike traditional brokerage firms with managers and compliance officers working on-site, independent broker-dealers operate more like franchises. They have many small offices across the country, but supervisors aren’t physically present to watch what happens day-to-day.
The business model focuses on opening many offices to generate steady income without the high costs of full-service branches. The financial advisors at these firms typically run their own separate businesses and aren’t direct employees of the broker-dealer. This means they have more independence but less oversight, which can leave investors vulnerable to misconduct.
Supervision usually comes from remote managers called OSJ (Office of Supervisory Jurisdiction) supervisors who monitor multiple small offices from a distance. These OSJ managers often run their own businesses too and can’t provide full-time supervision. They typically review accounts and transactions after the fact, not as they happen.
This means there’s usually no immediate review of new accounts, securities trades, client correspondence, or other business activities. Nobody is on-site to catch forged signatures, false information about a client’s finances or investment goals, or misleading statements to investors. Many offices only get one compliance visit per year, leaving plenty of time for problems to develop unchecked.
The North American Securities Administrators Association (NASAA) has documented more cases of sales abuse and investor losses at independent broker-dealers compared to traditional firms with on-site supervision. This weaker oversight structure directly leads to more customer complaints and regulatory problems.
Kovack Securities Inc. Has Many Different Regulatory Problems
Kovack Securities’ rapid growth has not been without consequences. There have been at least 4 Federal, state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA)) for a violation(s) of investment-related rules or regulations. In addition, there have been scores of customer complaints filed against Kovack Securities for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS KOVACK SECURITIES, INC. HAS FACED OVER THE YEARS*
Kovack Securities has been censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors.*. An example of one of its supervisory failures is below:
FINRA Sanctions Kovack Securities For UIT Sales Charges
As a result of one of FINRAs routine investigations, it discovered that Kovack Securities failed to apply sales charge discounts to certain customers’ eligible purchases of unit investment trusts (“UITs”) in violation of FINRA Rule 2010. In addition, FINRA found Kovack Securities failed to establish, maintain and enforce a supervisory system reasonably designed to ensure that customers received sales charge discounts on all eligible UIT purchases in violation of NASD Rule 3010 and FINRA Rule 2010. For these supervisory failures, the FINRA imposed a censure and a fine of $175,000 on the broker-dealer and ordered it to pay the affected customers restitution of over $119,000.
*Above is only one of the regulatory disciplinary actions filed against Kovack Securities by FINRA. There are at least 3 more SEC, FINRA, NASSA, and/or state securities regulator investigations and enforcement actions reported on BrokerCheck as regulatory disciplinary proceeding disclosures.
Did Kovack Securities Inc. Advisor Misconduct Cause You Investment Losses?
When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Kovack Securities is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Kovack Securities without representation with an attorney about their complaints and have their complaints denied.
Consult With An Attorney Who Recovers Investment Losses Caused By Kovack Securities, Inc. Today
The securities attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 45 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Kovack Securities cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.
