Senior Investors’ Fraud Complaint Against KCD Financial & Fess Financial Seeks up to $1M in Damages
A Dallas, Texas couple has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Christopher Charles Fess, of Fess Financial and KCD Financial, where he is a registered investment advisor. The claimants are seeking up to $1M in damages and their case will be heard by a panel of arbitrators in Dallas.
Our Texas stockbroker fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm) are representing these investors in their elder financial fraud claim. If you suffered losses involving Fess Financial investment advisor, Christopher Fess, contact us online or call (214)-613-5306.
Fess Financial Advisor And KCD Profited From Selling Couple Unsuitable Investments
The couple, both retirees in their seventies, had already invested their funds through another broker-dealer when Christopher Fess and KCD Financial pursued them to handle their money. The KCD Financial broker/Fess Financial investment advisor eventually went on to manage all of the claimants’ liquid assets.
Both of them had made it clear that they wanted to take on no risk and would be happy with modest returns. Rather than keeping the couple’s retirement funds safe as promised, Fess and KCD Financial set up an “overly aggressive” portfolio strategy that was unsuitable and improperly allocated even as it paid the broker and the firm hefty commissions and fees.
All the while, Fess and KCD Financial could and should have placed these older investors’ funds in investments that were not only less expensive but also more suitable for their age. Instead, they ended up losing hundreds of thousands of dollars in retirement funds.
KCD Financial Does Not Have On-Site Supervision
It is important to note that KCD Financial, which has employed Fess for 14 years, is not your typical broker-dealer.
The firm has no on-site compliance or supervisors, at least for Fess they did not. This is the type of place that an advisor interested in making higher commissions and not wanting to face oversight would want to work for.
At KCD, which has come under fire for selling unsuitable products to senior investors, Fess, allegedly, is known for favoring private placements, REITs, and oil and gas master limited partnerships (MLPs), which are unregistered and untraded financial instruments.
It is these types of investment that Fess sold to the couple, including AR Global, ARC, MCI/Megatel, and GMI/BDS, at least one variable annuity, and FS Energy Power and Power, which is a private MLP.
If there had been proper oversight by KCD Financial, these investments would not have been sold to these retirees. Now, the claimants are alleging unsuitability, misrepresentations and omissions, overconcentration, and gross lack of supervision.
Other Customers Have Accused Fess of Unsuitability
Christopher Fess has been a broker for 27 years. Before KCD Financial, he worked for Walnut Street Securities, Washington Square Securities, Northwestern Mutual Investment Services, and two other firms.
There are five other customer complaints on Fess’s BrokerCheck record, including an unsuitable investment complaint that was brought in June of this year. A broker fraud complaint from 2003 was settled for $90K. An annuity fraud case also from that year was settled for $200K. A 2001 unsuitable investment case naming Fess ended in a $130K settlement.
Texas Investment Fraud Lawyers
With our Texas stockbroker fraud offices based in Dallas, SSEK Law Firm represents investors throughout the state. For 30 years, we have helped thousands of investors to get back their losses caused by broker misconduct or negligence. Call (214)-613-5306 for your free case consultation.