Michael Allen Kamperman of Waco Texas a stockbroker formerly employed by HD Vest Investment Services has been fined $20,000.00 and suspended for eighteen months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that Kamperman poorly advised customers of HD Vest Investment Services in regard to energy sector investments and alternative investments including inverse exchange traded notes investments. Letter of Acceptance Waiver and Consent No. 2016050400401 (June 20, 2019).
According to the AWC, bad investment recommendations were made by Kamperman to the firm’s customers between May of 2010 and June of 2016. Evidently, customers who held individual retirement accounts and 401(k) accounts were steered by Kamperman towards allowing excessive amounts of speculative energy sector securities, including risky oil and gas products, to be held in their accounts. This caused customers’ accounts to be overconcentrated in the aggressive investments and overexposed to volatility.
The AWC stated that one of the customers had received recommendations from Kamperman about buying and holding a short-term inverse leveraged exchange traded note. FINRA stated that the investment Kamperman advised the customer to buy was not meant to be held for any longer than one trading session. Yet, the customer’s 401(k) account contained the inverse leveraged exchange traded note for almost sixteen months.
FINRA stated that it was unsuitable for the customer to have been advised by Kamperman to buy the risky energy sector investments given the customers’ objectives, experience, tolerance for risk, financial needs, and financial status. The AWC additionally pointed out that there was no adequate basis for Kamperman to conclude that it was advisable for any investor to buy and hold the alternative investment he recommended. Evidently, Kamperman’s bad investment recommendations led customers to sustain trading losses of $407,000.00. FINRA found Kamperman’s conduct to be violative of FINRA Rules 2010 and 2111(a) and National Association of Securities Dealers (NASD) Rule 2310.
FINRA Public Disclosure confirms that Kamperman is referenced in three customer initiated investment related disputes which pertain to allegations of his improper conduct while he was associated with Prospera Financial Services and PaineWebber. Specifically, a customer initiated investment related complaint concerning Kamperman’s activities was resolved for $65,000.00 in damages supported by accusations that misrepresentations had been made to the customer; transactions placed in the customer’s account failed to be suitable given the customer’s financial profile; and unauthorized trades were executed in the customer’s investment account.
Thereafter, a customer filed an investment related complaint in regards to Kamperman’s conduct in which the customer sought $50,000.00 in damages founded on allegations that while Kamperman was employed by Prospera Financial Services Inc., transactions were effected in the customer’s brokerage account that were not suitable for the customer; trades were executed on an excessive basis; and the customer’s investment account had been mismanaged.
Moreover, a customer initiated investment related arbitration claim regarding Kamperman’s conduct was settled for $320,000.00 in damages based upon accusations that contractual and fiduciary obligations which were owed to the customers had been breached; omissions were made to the customers concerning the risks of the equities selected for the their accounts; and transactions executed in the customers’ accounts were not suitable for them, causing the customers to suffer unwarranted investment losses. FINRA Arbitration No. 16-01641 (Oct. 26, 2017).
Kamperman’s registration with HD Vest Investment Services has been terminated as of June 30, 2017.
