As a seasoned financial analyst and legal expert with over a decade of experience, I’ve seen my fair share of fraud allegations involving brokers and financial advisors. The case of Jason Kimber, a JW Cole Financial broker based in Logan, Utah, caught my attention due to the seriousness of the allegations and potential impact on investors.
Pending Disputes Stem from Fraud Allegations
Between 2022 and 2024, eight parties of investors filed disputes involving Mr. Kimber. The disputes allege that he was “indirectly involved” in a former partner’s fraud, that he “indirectly benefited” from the fraud, and/or that he failed to identify the fraud. While one dispute was withdrawn, seven others seeking over $37 million in damages are still pending.
As Warren Buffett once warned, “Risk comes from not knowing what you’re doing.” Investors place immense trust in their financial advisors to manage risk and act in their best interests. When that trust is violated, the financial and emotional toll can be devastating. In fact, according to a study by Bloomberg, investment fraud and bad advice from financial advisors cost investors billions of dollars each year.
Jason Kimber’s Background and Broker Dealer
According to FINRA’s BrokerCheck, Mr. Kimber has 11 years of experience as a broker. Key facts about his background include:
- Registered with JW Cole Financial in Logan, Utah since 2018
- Previously registered with Allegis Investment Services (2014-2018) and Summit Brokerage Services (2013-2014)
- Completed industry exams including Series 65 and Series 63
- Does business under the brand Summit Capital Financial Group
It’s worth noting that Mr. Kimber has no other disclosures or complaints on his record prior to the current fraud allegations. However, even advisors with clean histories can engage in misconduct, underscoring the importance of thorough due diligence by investors.
Explaining the Allegations and Relevant FINRA Rule
At the heart of the disputes against Mr. Kimber are allegations that he either participated in, benefited from, or failed to identify fraud by a former partner. FINRA Rule 2020 prohibits brokers from effecting transactions or inducing the purchase or sale of securities by means of manipulation, deception or other fraudulent devices. Brokers have a duty to uphold high ethical standards and promptly report any suspicious activity.
While the details of Mr. Kimber’s alleged role are not fully clear, he maintains his innocence, stating: “I was not [aware of the fraud]. My former partner conducted these activities as an outside business activity. I was unaware of his actions. My former partner acted without any association or involvement from or by me or my firm.”
Potential Consequences and Lessons for Investors
If the allegations against Mr. Kimber are ultimately substantiated, he could face serious consequences from regulators, including fines, suspension or permanent barring from the securities industry. Impacted investors may be able to recover some losses through FINRA arbitration or mediation.
Beyond the fate of this specific advisor, the case highlights important lessons for investors:
- No advisor is immune from potential misconduct, regardless of experience or record
- Fraudulent schemes are often complex and may involve undisclosed outside business activities
- If something seems too good to be true or “guaranteed”, be very cautious
- Regularly review your accounts and ask questions about any suspicious transactions
- Thoroughly vet advisors using FINRA BrokerCheck and other resources
A staggering 1 in 44 financial advisors have misconduct records, according to a 2019 Stanford University study. While most advisors are ethical, it’s crucial to stay vigilant. If you suspect fraud or misconduct, consult with knowledgeable securities attorneys to understand your rights and options.
The full fallout for Jason Kimber and his clients remains to be seen as the disputes progress. In the meantime, investors would be wise to treat this as a cautionary tale and strengthen their own due diligence and oversight efforts. Trust is earned, not blindly given, when it comes to your financial future.