The seriousness of the allegations against Howard Kavinsky cannot be overstated. As a financial analyst and legal expert with over a decade of experience, I have seen firsthand how misconduct by brokers can devastate investors. The disciplinary action recently taken by FINRA paints a disturbing picture of Mr. Kavinsky’s alleged actions while registered with B. Riley in Chicago.
FINRA’s Allegations of Falsified Account Statements
According to FINRA’s Letter of Acceptance, Waiver, and Consent (AWC), Howard Kavinsky allegedly:
- Falsified over 190 account statements for at least 8 customers, including senior citizens
- Overstated customers’ account balances to misrepresent the amount of funds
- Falsely reflected hedge fund investments that were never actually made for at least 6 clients
- Provided false responses to FINRA during their investigation
These are very serious charges that violate core industry rules and ethical standards. By allegedly falsifying statements and misleading both clients and regulators, Mr. Kavinsky abused the trust placed in him as a financial advisor. FINRA ultimately barred him from associating with any member firm in any capacity.
The fallout for investors can be significant in cases like this. Not only do they often suffer monetary losses, but their faith in the financial system is shaken. As the famous quote goes, “It takes 20 years to build a reputation and five minutes to ruin it.” Brokers who engage in misconduct tarnish the reputation of the entire industry.
Investor Dispute Seeking Substantial Damages
The seriousness of Mr. Kavinsky’s alleged actions is underscored by a pending investor dispute filed in June 2024. The claimants allege he provided false and misleading account information, and that client funds totaling $760,000 have gone “missing” from their accounts.
Any time client assets go unaccounted for, massive red flags are raised. Brokers have a fundamental duty to safeguard investors’ money. Failing to do so, either through negligence or intentional wrongdoing, is one of the gravest offenses a financial professional can commit. The six-figure amount of damages sought in this case speaks to the scope of the alleged misconduct.
B. Riley’s Termination of Kavinsky
It’s telling that B. Riley Wealth Management terminated Mr. Kavinsky in May 2024 for failing to follow firm procedures. According to his BrokerCheck report, those procedures related to creating and using consolidated client reports. The firm also alleged he misrepresented customers’ account values, created “unfounded customer statements,” and failed to forward “potential customer grievances.”
Firms have an obligation to reasonably supervise their brokers. When one of their registered representatives is accused of wrongdoing, it raises questions about the effectiveness of the firm’s compliance oversight. While B. Riley did ultimately fire Mr. Kavinsky, the allegations suggest a concerning pattern of misconduct that perhaps should have been detected and addressed sooner.
Fact: A 2020 study found that 7% of financial advisors have been disciplined for misconduct or fraud, according to Investopedia. This underscores the importance of thoroughly vetting any prospective advisor.
Kavinsky’s Background & Current Suspension
Prior to his termination from B. Riley, Howard Kavinsky worked for several other prominent financial firms in the Chicago area over his 13-year career as a broker. He started out at Hornor Townsend & Kent in 2011 before moving on to firms like Morgan Stanley and David A. Noyes & Company. Most recently, after leaving B. Riley in 2024, he briefly joined Supreme Alliance before being barred by FINRA.
The disciplinary action means Mr. Kavinsky is currently suspended from acting as a broker or otherwise associating with a broker-dealer firm. You can view his full FINRA report and history through BrokerCheck.
Protecting Investors’ Rights
Cases like this serve as a somber reminder of the damage that can be done when financial professionals violate their duties. Behind every disciplinary action there are real people – often seniors and retirees – who have had their trust betrayed and their financial security jeopardized.
Fortunately, impacted investors do have recourse. FINRA arbitration provides a forum for investors to pursue claims and potentially recoup their losses. It’s crucial that anyone who suspects impropriety or misconduct by their broker consult with an experienced securities attorney right away to understand their rights and legal options.
The path to justice and recovery isn’t always easy, but holding bad actors accountable is essential for maintaining the integrity of our financial markets. Cases like the allegations against Howard Kavinsky remind us of what’s at stake. As a legal and financial expert, I remain committed to advocating for investors and shining a light on misconduct in the industry. Because at the end of the day, people’s financial futures depend on it.
