Kyle Patrick Harrington of San Diego California a stockbroker formerly employed by National Securities Corporation has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon a FINRA Extended Hearing Panel’s findings that (1) Harrington converted a customer’s funds (2) Harrington tried to hide that he stole funds when investigated by FINRA and (3) Harrington used false wire requests forms (4) Harrington engaged in selling away from the firm, and (5) Harrison falsified information and documents when investigated. Department of Enforcement v. Kyle P. Harrington et al. Disciplinary Proceeding No. 2015047303901 (Nov. 12, 2018).
According to the Extended Hearing Panel, Harrington had willfully caused funds to be wired to him by a customer, LD, from LD’s own account. Those funds were evidently used for Harrington’s own benefit. Furthermore, Harrington never sought any permission from LD to justify the transfer of those monies from Harrington’s account. Harrington reportedly failed to return the customer’s funds after the unauthorized transaction was executed. Consequently, FINRA Extended Hearing Panel found that Harrington’s conduct was violative of FINRA Rule 2010.
Next, the Extended Hearing Panel stated that while FINRA had been investigating Harrington, he made contact with LD and steered the customer towards lying about his transfer of the customer’s funds. Particularly, Harrington reportedly asked Harrington to claim that Harrington transferred the money pursuant to LD’s rental of vacation property from him. Evidently, Harrington intended on thwarting FINRA’s investigation by hiding the fact that he converted the customer’s funds. FINRA’s Extended Hearing Panel found that Harrington’s conduct in this regard was violative of FINRA Rule 2010.
The Decision further stated that Harrington provided the firm documents when he was under investigation by his firm. Apparently, Harrington furnished wire transfer forms that were falsified. Consequently, the firm’s records and books maintained inaccuracies. FINRA considered Harrington’s conduct violative of FINRA Rues 2010 and 4511.
Moreover, the Extended Hearing Panel cited Harrington for selling away from National Securities Corp. Particularly, Harrington was found to have engaged in unapproved private securities transaction involving TZ and AB in regard to the purchase or sale of Islet stock. Harrington apparently failed to inform National Securities Corp about his involvement in those transactions, and additionally failed to make disclosures about effecting transactions involving PS and RF. Harrington’s activities in this regard were found by FINRA Extended Hearing Panel to be violative of FINRA Rule 2020 and NASD Rule 3040.
The Extended Hearing Panel also found that willful misrepresentations had been made by Harrington to National Securities Corp about the details of payments that had been obtained by him from TZ and AB which were ultimately placed into his banking accounts. Apparently, Harrington represented to the firm that TX provided Harrington a number of payments for renting VRBO, and that there was payment from AB totaling $100,000.00 that came from his prior employer. However, FINRA stated that those funds, unlike what Harrington contended, were intended for Islet stock purchases. Harrington evidently took part in the submission to the firm of fake VRBO rental contracts. Harrington apparently intended to conceal the nature of those transactions. The Extended Hearing Panel found that Harrington’s conduct was violative of FINRA Rule 2010.
Finally, the Extended Haring Panel concluded that Harrington failed to be forthcoming when investigated by the regulator. Apparently, Harrington furnished information and documentation to FINRA under Rule 8210. Apparently, Harrington directed a statement to be altered to erase any mention of AB originating a wire transfer of $100,000.00. The documents evidently pertained to Harrington selling away from the firm. FINRA additionally found that Harrington lied about his payments from LD being associated with investment advisory services Harrington purportedly claimed to have provided to LD between 2009 and 2012. Harrington’s conduct was found by FINRA Extended Hearing Panel to be violative of FINRA Rules 2010 and 8210.
FINRA Public Disclosure reveals that Harrington is referenced in nine more customer initiated investment related disputes containing allegations of Harrington’s misconduct during the time that he was associated with National Securities Corp., Matrix Capital, Bannockburn Partners, First Allied Securities, and CIBC World Markets Inc. Specifically, on August 19, 2014, a customer initiated investment related complaint regarding Harrington’s conduct was settled for $15,000.00 in damages based upon accusations that misrepresentations and omissions had been made to the customer in regard to real estate security investments. FINRA Arbitration No. 12-03542 (Aug. 19 ,2014).
Thereafter, Harrington was subject of a customer initiated investment related arbitration claim where the customer was awarded $105,000.00 in damages according to an arbitration claim in which Harrington was found liable on the customer’s claims of violations of California Corporation Code, breach of fiduciary duty, misrepresentation, fraud, and violation of Securities Exchange Act of 1934 Section 10(b) and Rule 10b-5in regard to Harrington’s Islet Sciences Inc. penny stock transactions; the firm was also found liable for failing to supervise due diligence. FINRA Arbitration No. 15-02368 (Dec. 6, 2016).
Another customer initiated investment related arbitration claim involving Harrington’s activities was resolved for $85,000.00 in damages supported by allegations including conversion of the customers funds, forgery, negligent handling of the customer’s funds, breach of fiduciary duties, over-concentration, excessive trading, misrepresentation and fraud in reference to the customer’s private placements and over-the-counter equities holdings. FINRA Arbitration No. 16-03547 (July 6, 2017).
Thereafter, a customer initiated investment related arbitration claim concerning Harrington’s conduct was settled for $20,092.00 in damages founded on accusations that including churning, misrepresentation, suitability, unauthorized trading, excessive trading, excessive commissions and supervisory failures pertaining to the inappropriate recommendation and placement of customers in speculative and illiquid investments including equipment leasing products, variable annuities and direct participation program or limited partnership interests. FINRA Arbitration No. 16-01293 (Nov. 5, 2017).
Harrington was discharged from National Securities Corp on November 18, 2016 based upon allegations that he converted a customers’ funds.
