Kim See Isaacson, of Salt Lake City, Utah, a stockbroker formerly registered with Morgan Stanley, has been permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon a Decision & Order of Offer of Settlement containing findings that she willfully defrauded a customer, failed to abide by the customer’s instructions, effected unauthorized trades, and tried to settle a customer’s dispute away from her firm. Department of Enforcement v. Kim Dee Isaacson, No. 20140401991012014040199101 (July 25, 2017).
According to the Decision, Isaacson defrauded customer HM – a seventy-one-year-old individual who invested through Isaacson since 1995 and during the ensuing years held an estimated $27,000,000.00 investment portfolio split among seventeen accounts. Apparently, customer HM was victim to Isaacson’s ongoing false statements that were intended to keep the customer in the dark about the true value of the customer’s investment accounts.
Apparently, in January of 2014, the customer’s account value was $3,100,000.00 less than the customer was made to believe via Isaacson’s misrepresentations to the customer. Through January 10, 2014, Isaacson reportedly made purchases of securities and long-term bonds when the customer instructed Isaacson not to effect the transactions. The Decision stated that Isaacson was also cognizant that he misled the customer daily in regard to his activities involving the customer’s account. Evidently, the customer was reportedly told that long-term bonds and other securities were purchased when no such transactions occurred.
Moreover, the Decision stated that bond positions were not sold in the customer’s investment portfolio when the customer requested that Isaacson process the transactions. Specifically, from June of 2012 to November of 2013, twenty-one bond purchases were made without the customer’s consent. Evidently, a total of thirty-hundred and thirty-three trades had been effected by Isaacson despite the accounts not having been set up for discretionary trading. The Office of Hearing Officers ultimately found that Isaacson’s conduct was violative of FINRA Rule 2020, Securities and Exchange Act of 1934 Section 10(b), and SEC Rule 10b-5.
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that on June 16, 2016, a customer was awarded $3,586,989.00 in damages according to an investment related arbitration claim involving Isaacson’s misconduct, based upon allegations that Isaacson, while associated with Morgan Stanley Smith Barney, effected unsuitable transactions in the customer’s account and made misrepresentations to the customer concerning exchange traded funds, unit investment trusts, and mutual funds transactions.
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