Mark Kemp’s Registration Suspended in Texas

Mark Kemp (CRD #: 2057200), a broker registered with McNally Financial Services Corporation, had his registration suspended in Texas, according to his BrokerCheck record, accessed on November 7, 2024. If you want to know more about his alleged conduct as a broker, read on.

Suspension in Texas

On October 14, 2024, the State of Texas alleged that Mark Kemp recommended high-risk reverse convertibles to elderly investors who were rolling over their employee-sponsored 401ks and looking to replace their lost income. He allegedly had no reasonable basis to believe these investments were in clients’ best interest.

While reverse convertible securities typically generate higher returns than other bonds, they are also complex investment products.

Mark Kemp allegedly recommended reverse convertibles linked to volatile equities that made them high-risk investments unsuitable for certain clients’ risk tolerances, investment objectives, and investing experience.

Pursuant to Section 4007.105(a)(3)(A) of the Texas Securities Act, the state suspended his registrations from October 14 to October 28, 2024. The state also ordered Mark Kemp and McNally Financial Services Corporation to refund certain clients.

Texas Securities Act

Section 4007.105(a)(3)(A) of the Texas Securities Act allows the Securities Commissioner to suspend registration of brokers and investment adviser representatives if they have engaged in inequitable sales practices relating to securities or investment advisory services.

Investor Disputes

On July 18, 2024, an investor alleged that Mark Kemp recommended unsuitable investments. The client seeks $209,816 in damages in this pending dispute.

In a dispute filed on March 3, 2023, multiple investors alleged that Mark Kemp made unsuitable recommendations and misrepresented high-risk investments. They also alleged that he overconcentrated their accounts in these investments. They sought $555,928 in damages and received a settlement of $150,000.

On July 20, 2021, an investor alleged that Mark Kemp violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Texas Securities Act, and committed fraud under Section 27.01 of the Texas Business and Commerce Code.

The client further alleged common law fraud, negligent misrepresentation, and breach of contract. They sought $370,006.75 in damages and received a settlement of $270,000.

FINRA Rule 2111

FINRA Rule 2111 defines suitable investments as securities that fit an investor’s profile. Brokers must use the information in an investor’s profile, such as their risk tolerance, age, and investing experience when making recommendations.

Investors who rely on brokers for recommendations may be able to recover their losses through FINRA arbitration.

FINRA Rule 2020

FINRA Rule 2020 prohibits the use of manipulative, deceptive, or otherwise fraudulent tactics to influence the purchase and sale of securities. Misrepresenting an investment’s risks, returns, requirements, or other features violates this rule.

Texas Business and Commerce Code

Section 27.01 of the Texas Business and Commerce Code defines and prohibits fraud in real estate and stock transactions.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

What are Blue Sky Laws?

Blue sky laws are state securities regulations that provide investors with an extra layer of protection against fraud. They frequently also define what investments qualify as securities in the state.

Background Information

Mark Kemp has passed the following exams:

• Series 65 Uniform Investment Adviser Law Examination
• Series 63 Uniform Securities Agent State Law Examination
• Securities Industry Essentials Examination
• Series 7 General Securities Representative Examination
• Series 6 Investment Company Products/ Variable Contracts Representative Examination

He is a registered broker in 11 states and is a registered investment adviser in Texas.

Mark Kemp has also worked with the following firms:

• Next Financial Group (CRD #: 46214)
• Hornor, Townsend & Kent (CRD #: 4031)
• The Mutual Life Insurance Company of New York (CRD #: 2873)
• Mony Securities Corp (CRD #: 4386)

Kurta Law Can Help

If you worked with Mark Kemp and you have concerns about your investments, contact Kurta Law today. Call 877-600-0098 or email info@kurtalawfirm.com.