Jeffrey Kenneth Kirkpatrick, of Dacula, Georgia, a stockbroker associated with LPL Financial LLC, has been fined $10,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Kirkpatrick falsified a wire transfer request form and caused his firm to maintain incomplete and inaccurate records and books. Letter of Acceptance, Waiver, and Consent No. 2021073031001 (September 12, 2023).
According to the AWC, Kirkpatrick falsified an employer wire transfer request form to facilitate a transfer of $1,000,000.00 from his customers’ account to a third-party entity’s account. Kirkpatrick signed the form upon the request of another registered representative who shared responsibilities on the account. Despite the form requiring a verbal confirmation with the customer regarding the details of the transfer, Kirkpatrick failed to make such confirmation. Furthermore, he did not inquire into the purpose behind the wire transfer or consult with either of the customers before signing and submitting the form to his firm. As a result of his actions, LPL Financial’s books and records were inaccurate.
Additionally, Kirkpatrick used non-approved channels for business communication. Despite attesting on a firm compliance questionnaire that he only used firm-approved email addresses for business correspondence, Kirkpatrick used his personal mobile phone to discuss firm matters via text message. Many of these text messages were related to the approval of wire transfer requests and one concerned a customer complaint. As the securities broker dealer did not authorize text messaging for business communication outside of its approved application, this led to the firm’s records being incomplete.
Therefore, Kirkpatrick violated FINRA Rules 2010 and 4511.
Kirkpatrick was also sanctioned by United States Securities and Exchange Commission (SEC) on June 30, 2022, because Kirkpatrick failed to supervise outside business activities. Kirkpatrick was ordered to pay a $15,000.00 fine to the SEC. He is also prohibited from acting in a supervisory or compliance capacity for five years. Order No. 3-20920.
According to SEC, Kirkpatrick was responsible for administering Hamilton Investment Counsel LLC’s compliance program. Kirkpatrick supposedly failed to adequately implement the compliance program and monitor outside business activities of investment advisory representatives working for the firm.
Specifically, the SEC found that Kirkpatrick received communications from an investment advisory representative about an outside activity but did not follow up to ensure the formal reporting forms were submitted or review whether the activity presented any conflicts of interest. SEC further alleged that Kirkpatrick did not take enough steps to disclose the representative’s outside activities to the firm’s customers. Over time, Kirkpatrick reportedly received multiple communications indicating that the representative had not complied with the firm’s compliance policies, but he failed to act on this information.
SEC also claimed that Kirkpatrick did not review certain flagged transactions involving transfers of customer assets to the representative’s outside business. The SEC concluded that Kirkpatrick violated Investment Advisers Act of 1940 Section 206(4).
Kirkpatrick was associated with LPL Financial LLC in Dacula, Georgia, from October 14, 2016, to October 27, 2021.
