Sean Michael Kane, of York, Pennsylvania, a stockbroker registered with Waddell Reed, is the subject of an enforcement action initiated by SEC in which the regulator is seeking sanctions against Kane based upon allegations that Kane breached fiduciary duties and committed fraud. SEC v. Sean Michael Kane, Complaint No. 1:23-cv-00371 (March 1, 2023).
According to the Complaint, between October 2018 and February 2021, the brothers, referred to as the Kanes, acted as investment advisors registered with a firm known as Investment Adviser 1. Their clientele allegedly consisted of over a hundred people, with more than $27,000,000.00 in managed assets. As investment advisor representatives, the Kanes were expected to act in their customers’ best interest, disclose all significant facts, and avoid misleading their customers.
However, in February 2021, the Kanes were allegedly terminated by Investment Adviser 1 for company policy violation. Despite this, the brothers purportedly attempted to mislead their customers into following them to a new firm. According to the Complaint, they falsely claimed that they had left Investment Adviser 1 voluntarily, while also pretending to still be registered with the previous firm and capable of handling their customers’ transactions. The Kanes impersonated customers during communications with Investment Adviser 1 for purposes of effecting securities transactions.
SEC alleges that the Kanes violated Investment Advisers Act of 1940. Consequently, the SEC is seeking an injunction and civil penalty against the Kanes.
Sean Kane was registered with Waddell Reed as a stockbroker from October 2, 2018, to March 3, 2021. He was registered with Cambridge Investment Research Inc. as a stockbroker from March 25, 2021, to March 30, 2023. On March 2, 2023, Cambridge Investment Research Inc. discharged Kane based upon allegations that Kane committed fraud and breached fiduciary duties.