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John Kasel: Former KMS Advisor Suspended Over Alleged Outside Business Activity
A disciplinary action taken by the Financial Industry Regulatory Authority against former Seattle, Washington and Scottsdale, Arizona broker and investment advisor John Kasel (CRD# 4382483) suspended him over allegations he participated in an unapproved outside business activity. A former representative of US Bancorp Investments and KMS Financial Services, Kasel was fined $25,000 and suspended for 18 months.
According to a Letter of Acceptance, Waiver and Consent (No. 2017053496701) dated February 2019, John Kasel participated in an unapproved business activity between May 2011 and July 2012 in which he “actively manag[ed] a customer’s real estate properties” and received compensation for such, violating FINRA rules 3270 and 2010. FINRA’s findings state further that around May 2011, John Kasel entered in an agreement with a customer in which he “received a fee to perform a myriad of management duties” in connection to rental properties owned by the customer. According to FINRA, he did not disclose this arrangement to his member firm. The findings go on to state that over a fourteen-month period, he “actively managed” the properties “on a daily basis for up to 20 hours per week.” His activities included visiting properties, dealing with the properties’ managers, agents and developers, communicating with and securing tenants, working with contractors, and paying various expenses, such as insurance policies and property taxes. He also allegedly “determined the properties’ value and decided which properties to rent and which to sell,” among other duties, and in connection with these activities was made a signatory on the customer’s company’s checking account.
According to FINRA’s findings in the matter, John Kasel was paid $2,000 a month for these services, a fee that was eventually raised to $4,000 a month, and received in total at least $26,500. FINRA states that he “never disclosed” his alleged outside business activities to his firm, in spite of firm policies requiring such a disclosure. FINRA also states that he “incorrectly responded” on two annual firm compliance questionnaires that he was not participating in outside business activities. As a result of the foregoing alleged conduct, which FINRA found to be in violation of FINRA rules, he was fined $5,000 and suspended from association with any FINRA member in any capacity for three months.
John Kasel is not currently registered as a broker or investment advisor. His employment history includes US Bancorp Investments, KMS Financial in Scottsdale, Arizona, Merrill Lynch, and Morgan Stanley. He currently holds no state licenses and has passed four securities industry qualification examinations.