BROKER REPORT: Financial Advisor Kenneth Daley Barred from Conducting Securities Business

The securities fraud attorneys at Malecki Law are interested in hearing from investors who have complaints against stockbroker Kenneth Daley.  Mr. Daley was employed and registered from October 2007 to June 2016 with Merrill Lynch, Pierce, Fenner & Smith, Inc., a Garden City, New York broker-dealer, according to his publicly available BrokerCheck, as maintained by the Financial Industry Regulatory Authority (FINRA).  According to BrokerCheck records, Mr. Daley voluntarily resigned from Merrill Lynch amid allegations that he was involved in “[c]onduct involving improperly receiving money from a client via checks written from an outside account.”

Per his BrokerCheck report, prior to his employment and subsequent resignation from Merrill Lynch, Mr. Daley was employed by Wachovia Securities from 2003 to October 2007.

Subsequent to his resignation, Mr. Daley was barred from association with any FINRA member broker-dealer on June 27, 2016 by FINRA, after submitting a Letter of Acceptance, Waiver and Consent No. 2016050129701 (AWC).  According to the AWC, Mr. Daley violated:

  • FINRA Rules 2150 and 2010, for requesting and receiving from a customer personal checks that were deposited in Mr. Daley’s personal bank account totaling $29,000;
  • FINRA Rule 4511 and SEC Rules 17a-3 and 17a-4, for contacting customers through his personal cell phone, which was prohibited by Merrill Lynch; and
  • NASD Rule 2111 and 2010, for recommending that a customer purchase a non-traditional, leveraged crude oil exchange traded fund without a reasonable basis to do so.

Brokers are not permitted to accept money from clients in transactions that are not disclosed and approved by the broker’s employing firm.  They are prohibited from using methods of communication with their customers that are not supervised by their employing member firm.  Finally, brokers are obligated by FINRA Rule 2111 to recommend securities that are suitable for their customers.  To ensure recommendations are suitable, each broker must consider a client’s age, tax status, net worth, investment experience, and risk tolerance, among other factors.