The ex-advisor allegedly tried to cover up hundreds of unauthorized trades
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A former representative at Morgan Stanley faces charges from the Financial Regulatory Authority (FINRA) in the US for allegedly hiding losses from a senior client.
According to a FINRA disciplinary document, Kim Dee Isaacson misrepresented the value of 17 accounts belonging to a now 71-year-old client, reported Financial Advisor IQ.
Isaacson, a securities-industry veteran since 1978, allegedly inflated the accounts’ cumulative value by US$3.1 million, making 360 trades behind his client’s back from May 2010 to January 2014. Some of those trades involved securities that he had been instructed not to buy.
Over the period of unauthorized trading, Isaacson collected over US$400,000 — around 18.5% of his earnings — in commissions and advice fees.
In 2009, he allegedly built an asset-allocation scheme with projected annual returns of 4% to 6% and used it to manage the client’s accounts. By May 2010, the accounts had lost US$445,000, which Isaacson concealed by reporting inflated values in near-daily phone calls, according to the regulator.
Later on, Isaacson supposedly tried to settle matters with the client without letting Morgan Stanley know. The firm started to investigate allegations that he’d misinformed the client regarding his accounts’ performance, prompting him to voluntarily resign in February 2014.
Isaacson’s BrokerCheck profile shows that he has been registered with Ameriprise ever since. His record, which goes back to 2005, reflects four customer disputes.
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According to a FINRA disciplinary document, Kim Dee Isaacson misrepresented the value of 17 accounts belonging to a now 71-year-old client, reported Financial Advisor IQ.
Isaacson, a securities-industry veteran since 1978, allegedly inflated the accounts’ cumulative value by US$3.1 million, making 360 trades behind his client’s back from May 2010 to January 2014. Some of those trades involved securities that he had been instructed not to buy.
Over the period of unauthorized trading, Isaacson collected over US$400,000 — around 18.5% of his earnings — in commissions and advice fees.
In 2009, he allegedly built an asset-allocation scheme with projected annual returns of 4% to 6% and used it to manage the client’s accounts. By May 2010, the accounts had lost US$445,000, which Isaacson concealed by reporting inflated values in near-daily phone calls, according to the regulator.
Later on, Isaacson supposedly tried to settle matters with the client without letting Morgan Stanley know. The firm started to investigate allegations that he’d misinformed the client regarding his accounts’ performance, prompting him to voluntarily resign in February 2014.
Isaacson’s BrokerCheck profile shows that he has been registered with Ameriprise ever since. His record, which goes back to 2005, reflects four customer disputes.
For more of Wealth Professional's latest industry news, click here.
Related stories:
What protections are in place for at-risk senior investors?
CIBC: Canadians caring for aging parents face $33 bn in yearly costs
