Can I recover losses from investments with former UBS Financial Services Inc. broker Paul Koch (CRD# 1777599) regarding outside business activity, also known as selling away. He has been registered with RBC Capital Markets, LLC in Wayzata, Minnesota from 2018 to 2022 and with UBS Financial Services Inc. in Wayzata, Minnesota from 2009 to 2018.
In October 2021, the United States Secret Service opened an investigation regarding: “Mr. Koch provided the Firm with information indicating that at the time of his voluntary resignation he was the subject of an investigation by the United States Secret Service concerning possible misconduct.”
In March 2022, FINRA barred Paul Koch after he “consented to the sanction and to the entry of findings that he refused to provide documents and information requested by FINRA in connection with its investigation into an amended Form U5 filed by Koch’s member firm disclosing allegations that he recommended risky and unsuitable investments in various outside business ventures where his wife was a partial owner, and that Koch and his wife diverted funds from the outside investments and accounts for their personal gain. The findings stated that although Koch initially cooperated with FINRA’s investigation, he ceased doing so.”
Paul Koch Customer Complaints
He has been the subject of three customer complaints between 2005 and 2021, one of which was denied, according to his CRD report:
February 2021. “The Financial Advisor is not named as a defendant in the federal lawsuit, but is the subject of certain allegations in the federal lawsuit that he was an alter ego of defendants involved in breach of fiduciary duty, negligence and conversion of funds.” The customer sought $75,000 in damages and the case was settled for $100. The complaint was regarding outside investments and the complaint took place while he was registered with UBS Financial Services Inc.
May 2019. “Time frame: July 2011-October 2018 Allegations: The Claimants and their LLC allege that the FA recommended risky and unsuitable investments in various outside business ventures where his wife was a partial owner in janitorial businesses, second hand clothing stores, hair cut establishments, housing developments and venture capital enterprises. They also allege that the FA and his wife diverted funds from these outside investments and accounts for their personal gain. A First Amended Statement of Claim has been received alleging a breach in fiduciary duties. The claims related to these investments are for recovery of damages related to theft, conversion, and/or misappropriation that may have been related to the investments.” The customer sought $10 million and the case was settled for $3,750,000. The complaint was regarding outside investments and the complaint took place while he was registered with UBS Financial Services Inc.
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, UBS Financial Services Inc. may be liable for investment or other losses suffered by Paul Koch’s customers.
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