John Billy Kakonikos, of Lake Success, New York, a stockbroker formerly associated with Caldwell International Securities, was fined $10,000.00 and suspended for eighteen months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he effected unauthorized, as well as unsuitable and excessive trades in a customer account. Letter of Acceptance, Waiver and Consent, No. 2015045718107 (Nov. 11, 2016).
According to the AWC, between September 1, 2012, and September 30, 2013, Kakonikos made recommendations and effected trades on behalf of customer, EP, within EP’s securities account. Apparently, fifty percent of the one-hundred and seventeen trades effected in EP’s account had taken place without EP providing Kakonikos requisite authorization.
The AWC revealed that EP’s account, pursuant to Kakonikos’ trading, was subject to a 49.79% cost/equity ratio and annual turnover rate of 13.68. Apparently, such trading caused EP to realize $72,524.53 in trading losses, even though Kakonikos generated $41,617.56 in commissions and fees. Ultimately, EP’s account was reportedly subject to overall costs of $53,168.22, which led EP to be subject to an overall 62.23% cost/equity ratio.
FINRA stated that Kakonikos’s trading was quantitively unsuitable and excessive for EP, in view of EP’s novice investment experience, needs, and financial circumstances. As such, FINRA found that Kakonikos’s conduct was violative of FINRA Rules 2010 and 2111.
FINRA also cited Kakonikos for effecting trades in EP’s account without authorization. Apparently, fifty-five transactions consisting of sales and purchases of securities were effected in EP’s account despite EP having no knowledge regarding such trades, nor having provided Kakonikos with any authorization. FINRA found that Kakonikos’s conduct in this regard was violative of FINRA Rule 2010.
FINRA Public Disclosure records reveal that Kakonikos has been subject to five customer arbitrations. Particularly, on August 10, 2004, Kakonikos was subject to a customer initiated investment related arbitration claim, in which the customer requested $109,536.00 in damages based upon allegations that Kakonikos effected trades in the customer’s account without authorization, and churned the customer’s account.
On March 13, 2006, a customer initiated investment related arbitration claim involving Kakonikos’ conduct was settled for $2,000.00 in damages based upon allegations that Kakonikos breached his fiduciary and contractual duties to the customer, made misrepresentations and omissions concerning investments.
On July 8, 2008, a customer initiated investment related arbitration claim involving Kakonikos’s actions was settled for $100,000.00 in damages based upon allegations against Kakonikos including breach of contract, breach of fiduciary duty, negligence, excessive trading, and churning.
On September 22, 2008, a customer filed an investment related arbitration claim involving Kakonikos’ conduct, in which the customer requested $130,000.00 in damages based upon allegations that Kakonikos traded in an excessive manner in the customer’s account. On November 10, 2008, a customer filed an investment related arbitration claim involving Kakonikos’s actions, in which the customer requested $17,442.00 in damages based upon allegations that Kakonikos made misrepresentations to the customer, and breached his fiduciary and contractual duties to the customer.
Since 1999, Kakonikos has been associated with six different broker dealers, two of which have been expelled by securities regulators for violation of federal securities laws or are otherwise defunct. Following Kakonikos’ termination from Caldwell International Securities, he became registered with Southeast Investments, N.C., Inc. from February of 2014 to February of 2016.
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