Christopher Kozak of Highland Ranch Colorado a stockbroker formerly registered with Cetera Advisors LLC has been fined $10,000.00 and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he took part in outside business activities without providing required notice to Cetera Advisors LLC. Letter of Acceptance Waiver and Consent No. 2017053017201 (Nov. 4, 2019).
According to the AWC, in 2016, a Cetera Advisors stockbroker created Company A for purposes of buying Company B. Apparently, the stockbroker’s establishment of Company A was not made known to the securities broker dealer. Kozak was instead asked by the stockbroker to perform due diligence pertaining to Company A’s planned purchase of the assets of Company B. The AWC stated that Cetera Advisors was later made aware that the stockbroker advised customers of the securities broker dealer to invest in Company B. In fact, a total of $530,000.00 in investments were made in Company B because of the stockbroker’s advice, all unbeknownst to Cetera until a later point in time.
The AWC stated that Company B’s assets were purchased by Company A in July of 2016. During this time, Kozak was the Chief Operating Officer for Company A, where he controlled Company A’s management and operations. Kozak’s involvement with Company A, which constituted an outside business activity, was not made known to Cetera Advisors until February of 2017 after an inquiry had been made by FINRA. The AWC also stated that Kozak was issued a compliance questionnaire from Cetera Advisors. In submitting that questionnaire, Kozak lied about being compliant with the securities broker dealer’s rules which prohibited, inter alia, Kozak from engaging in unapproved outside business activities.
FINRA indicated that of the $530,000.00 which had been invested in Company B by customers of the securities broker dealer, $300,000.00 has not been repaid to them. FINRA determined that Kozak’s conduct was violative of FINRA Rules 2010 and 3270.
Kozak’s registration with Cetera Advisors has been terminated as of November 11, 2018.
