Yong Kim Facing Sanctions For Failure to Supervise Representatives

Financial Industry Regulatory Authority (FINRA) BrokerCheck shows disclosures about securities principal Yong Soo Kim (also known as Yong Kim) [CRD: 1747849, Los Angeles, California]. Kim joined Kayan Securities Inc. on November 28, 2011. Kim was employed as a principal responsible for supervising trading activities at Kayan Securities. Keep reading to learn more about the sanctions Kim is facing.

California Regulatory Body Issues Sanctions to Kim

 On July 15, 2024, the California Department of Financial Protection and Innovation imposed sanctions against Kim. Under a two-year "Agreement of Undertaking," the individual must be on heightened supervision. He is barred from holding supervisory roles in California and prohibited from soliciting or managing client accounts with discretionary authority.

FINRA Sanctions Yong Kim For Failure to Supervise Representatives

On May 16, 2024, FINRA sanctioned Yong Kim with a $5,000 fine and a two-month suspension from acting in any principal capacity. The sanctions resulted from Kim’s alleged failure to adequately supervise representatives who engaged in excessive trading in client accounts, violating FINRA Rules 2010, 3110, and Regulation Best Interest (Reg BI).

From 2018 through 2021, Kayan Securities and Kim supposedly lacked a supervisory system and written supervisory procedures that complied with the Care Obligation of Reg BI and FINRA Rule 2111, which requires firms to act in the best interest of their clients. As the principal, Kim was responsible for overseeing trading activity, but the procedures at the firm were insufficient. Although Kayan updated its procedures at one point to include benchmarks for turnover rates and commission-to-equity ratios, they were inadequate for identifying and preventing excessive trading.

Excessive Trading Supervision

Supposedly, in July 2020, the firm added sections to comply with Reg BI but did not improve its excessive trading supervision processes. Kim was tasked with contacting clients whose accounts triggered certain benchmarks, but the communications to investors failed to provide sufficient details about the trading activity or verify the investors’ understanding.

Failure to Supervise Allegations

Additionally, Kim allegedly failed to properly supervise a former registered representative, referred to as Securities broker 1, who engaged in unauthorized and excessive trading in the accounts of three clients (Client 1, Client 2, and Client 3). Despite red flags, such as high turnover rates, in-and-out trading patterns, and client complaints, Kim supposedly did not take adequate action. In June 2019, Client 1 reportedly complained about unauthorized trading in his account, but neither Kim nor Kayan Securities investigated the activity. Similar issues arose with Client 2 and Client 3, who also alleged unauthorized trading by Securities broker 1, yet Kim supposedly took minimal action by adjusting account objectives rather than stopping the activity.

Kayan Securities Allegedly Failed to Investigate

Kayan Securities supposedly failed to conduct a thorough investigation and allowed Securities broker 1 to continue trading until FINRA barred him in April 2021. Moreover, Kayan allegedly failed to report two written client complaints regarding Securities broker 1 to FINRA and did not update Securities broker 1’s Forms U4 and U5, violating FINRA Rule 1122.

Contact Soreide Law About Yong Kim Today

Contact Soreide Law Group online or at (888) 760-6552 to speak with a securities attorney for more information. Kim and the firms he worked for deny accusations of sales practice violations. Soreide Law Group has experience representing investors throughout the country. The firm handles cases on a contingency basis.