Merrill Lynch, Pierce, Fenner & Smith Incorporated recently terminated broker Charles Kenahan (CRD# 1351974) regarding claims of unauthorized and excessive trading.
Kenahan was registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated in Boston, Massachusetts from 2007 to July 2019, when he was terminated regarding, “Customers’ allegations of unauthorized trading, unsuitable investment recommendations and excessive trading.”
According to an article in InvestmentNews, in June 2019 Merrill Lynch paid a $40 million settlement to a customer who alleged his Kenahan churned his account and is facing a similar claim for $42 million from another customer of Kenahan.
In July 2020, CNBC reported that New Hampshire authorities are investigating Merrill Lynch and Kenahan over customer complaints of alleged misconduct that resulted in staggering losses. Settlement talks are underway, according to public records. According to the article, “One of Kenahan’s former clients who alerted the state securities regulator of the alleged wrongdoings is Craig Benson, New Hampshire’s governor from 2003 to 2005… Benson has filed his own FINRA arbitration claim, which is pending, against Merrill Lynch, and two of the firm’s former brokers, Kenahan and Dermod Cavanaugh, alleging losses of more than $50 million and market-adjusted damages of over $100 million.” According to the CNBC report, Cavanaugh partnered with Kenahan at Morgan Stanley and then moved to Merrill Lynch.
Furthermore, the CNBC report reported that the customers “said they thought they had found a financial advisor they could trust and that Cavanaugh and Kenahan would act in their best financial interests.”
Cavanaugh (CRD# 4030821) has two customer complaints on his CRD from 2009 and 2019. The most recent complaint from February 2019 is for $50,000,000 and is regarding, “The customer alleges unsuitable investments, unauthorized trading and excessive trading from 2007 until 2017.” Cavanaugh was registered with Merrill Lynch in Boston, Massachusetts from 2007 to 2017.
Kenahan has been the subject of four customer complaints between 2009 and 2018, one of which was denied, according to his CRD report. Recent complaints are regarding:
- May 2018. “The Customer alleges excessive trading and unsuitable investment recommendations from 2012 until 2017.” The customer is seeking $700,000 in damages and the case is currently pending. This case is regarding common and preferred stocks.
- March 2018. “The customer alleges unsuitable investment recommendations, excessive trading and misrepresentation from February 2012 until December 2017.” The case was settled for $40 million. This case is regarding common and preferred stocks and penny stocks.
- February 2018. “The customer alleges unsuitable investments and excessive trading from December 2007 to February 2018.” The customer case is currently pending. This case is regarding common and preferred stocks.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Merrill Lynch may be liable for investment or other losses suffered by Kenahan’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form below for a free consultation.
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