Publicly available records recently provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker/adviser Kim K. Kopacka (CRD # 3153396) was recently sanctioned by FINRA’s Department of Enforcement after disciplinary proceedings were filed on March 25, 2019. According to the March 25, 2019 Complaint filed by FINRA, charges of misconduct were brought against Mrs. Kopacka and Ms. Beth Ann DeBouvre (CRD # 3176483) for their involvement in allowing Mr. Timothy James Kopack (CRD # 1268347), Mrs. Kopacka’s husband, who was both statutorily disqualified in the securities industry and unregistered, to associate with a FINRA member firm and act in a registered capacity.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking with investors who have complaints regarding Mrs. Kim K. Kopacka, Mr. Timothy James Kopacka and/or Ms. Beth Ann DeBouvre.
Background of Kim K. Kopacka
Ms. Kopacka first became registered in the securities industry in February 1999. Most recently she had been registered with IMS Securities Inc. (CRD # 35567), from November 2003 until March 2017. Her prior registrations include D.H. Hill Securities LLP (CRD # 41528) from February 1999 to December 2003.
Findings and Conclusions
On October 31, 2019, FINRA filed an Order Accepting Offer of Settlement in the disciplinary proceeding. Under the terms of the Offer of Settlement, Mrs. Kopacka consented to, without admitting or denying the allegations of the Complaint. According to the Order, from at least 2002 through 2016 Mrs. Kopacka along with Ms. Debouvre, a supervisory principal, enabled Mr. Kopacka to associate with and conduct securities business through FINRA member firms and engage in activities requiring registration, despite the fact Mr. Kopacka was unregistered and barred from associating with member firms.
During that period, Mr. Kopacka worked in the office with Mrs. Kopacka and Ms. DeBouvre and made securities recommendations to new and existing clients. Although transactions were recommended by Mr. Kopacka, Mrs. Kopacka completed the paperwork as the registered representative who serviced the customers and initiated the transactions.
Specifically, the Order states that it made the following findings and conclusions:
For much of two decades, Ms. Kopacka and DeBouvre permitted Mr. Kopacka, a statutorily disqualified and barred person, to conduct securities business through member firms.
In order to facilitate Mr. Kopacka’s business, they:
- Established and did business as “Gross Point Financial Services” in the same location that Mr. Kopacka conducted his “Gross Pointe Financial” business;
- Falsified new account forms, suitability forms, subscription agreements, investment disclosure forms, and other account documents to conceal the fact that Mr. Kopacka was meeting with customers, making recommendations, providing investment advice, and otherwise acting as an associated person and in a registered capacity;
- Failed to inform their customers that NASD barred Mr. Kopacka;
- Approved accounts that Mr. Kopacka opened and transactions that he recommended; and
- Attempted to dissuade customers from cooperating with the staff’s investigation of their misconduct.
The Order also found that the above described actions of Mrs. Kopacka violated the following rules of the securities industry:
- Article III, Section 3(b) of the NASD and FINRA By-Laws;
- FINRA Rule 8311;
- FINRA Rule 2010;
- NASD Rule 2110 and NASD-IM-8310-1; and
- NASD Rule 1031
FINRA Sanctions Kim K. Kopacka
As a result of the above findings, the following sanctions were ordered for Mrs. Kopacka:
- Mrs. Kopacka was suspended from associating with any FINRA member firm in any capacity for two years;
- Mrs. Kopacka was fined in the amount of $10,000.00; and
- Mrs. Kopacka was required to disgorge a portion of commissions received, which is ordered to be paid to FINRA in the amount of $350,000.00, plus interest at the rate set forth in Section 6621(a)(2) of the Internal Revenue Code, 26 U.S.C. 6621, from September 3, 2013 until the date of this Offer is accepted by the NAC.
Kim K. Kopacka has a History of Customer Complaints
In addition to the findings of FINRA’s Complaint, FINRA BrokerCheck for Mrs. Kopacka reveals she has a history of customer complaints and/or arbitrations alleging fraud that occurred during the relevant period of the FINRA investigation. Below is a description of customer complaints involving Mrs. Kopacka that are no longer pending:
- On June 15, 2017 a customer initiated arbitration was filed and received by IMS alleging damages in the amount of $25,000.00 for lack of due diligence, negligence, misrepresentation and breach of fiduciary duty. The arbitration was settled on November 14, 2017 in the amount $15,000.00.
- On June 9, 2017 a customer initiated arbitration was filed and received by IMS alleging damages in the amount of $954,700.00 for fraud, breach of fiduciary duty, civil conspiracy and civil RICO conspiracy. The arbitration was settled on February 19, 2019 in the amount $13,000.00.
- On May 23, 2016 a customer initiated arbitration was filed and received by IMS alleging damages in the amount of $450,000.00 for breach of fiduciary duty, unsuitable recommendations, lack of due diligence, negligence, breach of contract, fraud and violation of securities laws. The arbitration was settled on March 7, 2017 in the amount $80,000.00.
- On May 9, 2016 a customer initiated arbitration was filed and received by IMS alleging damages in the amount of $320,000.00 for breach of fiduciary duty, unsuitable recommendations, lack of due diligence, negligence, breach of contract, fraud and violation of securities laws. The arbitration was settled on March 10, 2017 in the amount $48,383.00.
As of the date of this writing, Mrs. Kopacka has six additional customer complaints and/or arbitrations pending.
If you or someone you know has or had a brokerage account with Mrs. Kim K. Kopacka, Mr. Timothy James Kopacka and/or Ms. Beth Ann DeBouvre and have concerns regarding losses in your investments or possible fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.