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Kevin Meadows: Columbus Broker Suspended Over Unsuitable Trades

Former Cape Securities broker Kevin Meadows (CRD# 2878889) was recently the subject of a sanction by the Financial Industry Regulatory Authority in connection to allegations he engaged in excessive and unsuitable trading. Previously based in the firm’s office in Columbus, Ohio, Meadows was issued a three-month suspension.

According to a Letter of Acceptance, Waiver and Consent (No. 2018057846301) dated January 2020, Kevin Meadows was associated with Cape Securities from 2013 until December 2017, when he voluntarily ended his registration. Between December 2016 and December 2017, FINRA states, he “excessively and unsuitably traded three accounts of a senior customer,” resulting in losses of about $39,671. The customer in question was a retiree, whose account documents listed an income between $100,000-$500,000, liquid net worth between $100,000-$500,000, and net work exceeding $500,000, FINRA states, noting that account documents listed his investment objectives as “capital appreciation/growth with risk, with an aggressive risk tolerance,” although the customer told FINRA staff “his risk tolerance was never aggressive.”

During the period in question, one of the customer’s accounts “had a turnover rate as high as 10.10 and a cost-to-equity ratio as high as 53%,” with the account experiencing $38,621 in commissions, fees, and ticket charges, and an overall loss of $28,140. Meanwhile, the customer’s second account “had a turnover rate as high as 7.93 and a cost-to-equity ratio as high as 44 percent,” with $12,767 in commissions, fees, and ticket charges, and an overall loss of $5,454, according to FINRA. His third account experienced a turnover rate as high as 6.93 and a cost-to-equity ratio as high as 37%, FINRA adds, with $10,876 in charges, and an overall loss of $6,077. The trading in all of these accounts was controlled by Meadows, FINRA goes on to state, who “recommended almost all of the trades.” FINRA concludes that his trading activity was both excessive and unsuitable considering the customer’s circumstances and objectives, and that it resulted in losses of about $39,671. As a result of the foregoing alleged conduct, which FINRA states violated FINRA Rules 2111 and 2010, Meadows was issued a three-month suspension from associating with any FINRA member firm in any capacity.

Kevin Meadows is currently not registered as a broker. His previous registrations include IBN Financial Services in Liverpool, New York; Lombard Securities in Columbia, Georgia; Cape Securities in Columbus, Georgia; First Allied Securities, Raymond James Financial Services, UBS Financial Services, and JC Bradford & Company. He has passed three securities industry qualifying examinations and his BrokerCheck report lists zero state securities licenses. (Information current as of May 21, 2020.)

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