Former Cetera Advisors LLC Broker Scott Kozak Investment Losses
Posted on Monday, August 27th, 2018 at 1:59 pm
Erez Law is currently investigating former Cetera Advisors LLC broker Scott Kozak (CRD# 1272583) regarding engaging in private securities transactions. Kozak was registered with Cetera Advisors LLC in Highlands Ranch, Colorado from 2001 to August 2018 when he was terminated regarding, “Violating firm policy prohibiting Personal Securities Transactions.”
In March 2020, FINRA suspended Kozak for two years and sanctioned him to a $10,000 civil and administrative penalty and fine after he, “consented to the sanctions and to the entry of findings that he participated in three sets of private securities transactions without providing prior written notice to his member firm, collectively soliciting firm customers and registered representatives to invest $1,166,000 in the securities of two companies. The findings stated that Kozak also invested his own funds in both of the companies. During an audit, Kozak falsely advised the auditor, and later falsely told the firm’s chief compliance officer, that no firm customers had invested in the company that was the subject of the second and third private securities transactions. The findings also stated that Kozak engaged in an outside business activity without notifying his firm, by forming a company through which he purchased the assets of, and operated, the company that was the subject of the second and third private securities transactions. The findings also included that Kozak falsely stated in annual firm compliance questionnaires that he had complied with the firm’s outside business activity policy and that he had not engaged in any private securities transactions.”
In March 2019, the Colorado Division of Securities opened an investigation into Kozak regarding, “engaging in (i) private securities transactions in violation of NASD Rule 3040 and FINRA Rules 3280 and 2010; and (ii) outside business activities in violation of FINRA Rules 3270 and 2010, for the period July 2011 to March 2017, without prior notice to or approval from his member firm, Cetera Advisors, LLC.”
In May 2018, FINRA opened an investigation into Kozak regarding, “Wells Notice Investigation #20170530172: FINRA has made a preliminary determination to recommend that disciplinary action be brought against Kozak for potential violations of: engaging in (i) private securities transactions in violation of NASD Rule 3040 and FINRA Rules 3280 and 2010; and (ii) outside business activities in violation of FINRA Rules 3270 and 2010, for the period July 2011 to March 2017, without prior notice to or approval from his member firm, Cetera Advisors LLC.”
Kozak has been the subject of four customer complaints between 2004 and 2008, one of which was denied and one was closed without action, according to his CRD report.
One settled case from 2008 was regarding, “clients requested rep liquidate positions from a non qualified account in order to fund closing costs and a down payment on a house. They allege representative did not follow instructions and instead liquidated positions in a qualified account which resulted in tax consequences of $75,161.00.” The case was settled for $27,500.
Another customer in 2008 was awarded $51,750 in damages in a complaint regarding, “misrepresentation & failure to follow instructions to place trades.”
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, Cetera Advisors LLC may be liable for investment or other losses suffered by Kozak’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.