Kim Dee Isaacson, of Salt Lake City, Utah, a stockbroker formerly registered with Morgan Stanley, was charged by Financial Industry Regulatory Authority (FINRA) in a Complaint alleging that Isaacson made omissions and misrepresentations to a firm customer concerning transactions effected in the customer’s account, and traded in a customer’s account without authorization; conduct that FINRA alleged was violative of Securities and Exchange Act Section 10(b) and Rule10b-5. Department of Enforcement v. Kim Dee Isaacson, No. 2014040199101 (June 9, 2017).
According to the Complaint, between May of 2010 and January 2014, seventeen accounts worth a total of $27,000,000 were placed with the firm. Isaacson was reportedly responsible for determining HM’s investment allocation by taking into account HM’s conservative to moderate risk tolerance and twenty-year investment horizon. Apparently, commissions of nearly $400,00.00 as well as advisory fees had been accumulated by Isaacson from HM for pursuing investment strategies with HM’s assets, which accounted for nearly nineteen percent of overall commissions earned by Isaacson during the period in question.
The Complaint alleged that between May of 2010 and January of 2014, customer HM was victim to omissions and misrepresentations made by Isaacson concerning the securities that were bought and sold in the customer’s brokerage accounts. Particularly, the value of HM’s holdings had been misrepresented by Isaacson with the intent to cloud the customer’s discovery of the real account values. The Complaint stated that HM, due to Isaacson’s misrepresentations, concluded that his brokerage account value was worth $3,100,000.00 more than the account’s actual value. FINRA alleged that misrepresentations were made by Isaacson to cover up the losses incurred by HM as well as the failure for HM’s performance to reflect what Isaacson promised.
The Complaint additionally stated that three-hundred and sixty trades had been effected by Isaacson in the customer’s account even though the transactions involved securities HM explicitly instructed Isaacson not to buy. These trades had reportedly not been discussed with Isaacson, and misrepresentations made in this regard caused HM to be unaware that trades were effected by Isaacson on an unauthorized basis. HM purportedly discovered the truth about his accounts in January of 2014, prompting Isaacson to try settling the customer’s investment related dispute outside the auspices of Morgan Stanley.
FINRA alleged that Isaacson ultimately failed to abide by the customer’s instructions, made omissions and misrepresentations to the customer, effected transactions that the customer never authorized, and attempted a settlement arrangement without his firm’s knowledge or consent. Consequently, FINRA alleged that Isaacson’s conduct was violative of FINRA Rules 2010 and 2020, as well as Securities and Exchange Act of 1934 Section 10(b) and Rul10b-5.
FINRA Public Disclosure reveals that Isaacson has been identified in four customer initiated investment related disputes containing allegations of his misconduct while employed with RBC Dain Rauscher, Inc., UBS Financial Services Inc., and Morgan Stanley. Particularly, on January 24, 2005, a customer filed an investment related written complaint involving Isaacson’s conduct, wherein the customer requested $2,003,000.00 in damages based upon allegations that he effected unauthorized stock and options transactions.
Subsequently, on December 19, 2008, a customer filed an investment related written complaint regarding Isaacson’s activities, in which the customer requested more than $5,000.00 in damages based upon allegations that Isaacson failed to pursue the customer’s instructions concerning GE stock purchases. Further, on April 4, 2014, a customer was awarded $3,586,989.00 in damages according to an investment related arbitration claim involving Isaacson’s conduct, based upon allegations that Isaacson, between 2011 and 2014, made misrepresentations to the customer regarding municipal debt, unit investment trust, mutual fund and exchange traded fund transactions effected in the customer’s account.
Additionally, on February 1, 2016, a customer filed an investment related arbitration claim regarding Isaacson’s activities, based upon allegations that he made misrepresentations to the customer, failed to provide the customer with accurate accounts values, and effected unsuitable exchange traded fund, unit investment trust, mutual fund, and municipal debt transactions in the customer’s account.
Isaacson’s registration with Morgan Stanley was terminated on February 6, 2014, based upon allegations that he misstated information to a firm customer. Since February 27, 2014, he has been associated with Ameriprise Financial Services, Inc.
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