The securities fraud lawyers at Mahany Law are investigating Haynes Kendall, a stockbroker and investment adviser employed at both Independent Financial Group LLC and Capital Financial Consultants Group. An investor reports losing a significant portion of his / her savings after investing it with Haynes Kendall. The customer claims his accounts were churned.
Churning occurs when a broker executes a large number of trades with the goal of generating commissions from the account.
The allegations that we have learned both about Mr. Kendall and Independent Financial Group are disturbing. In our experience, often when one customer has been victimized there are others who have not yet stepped forward. Some customers simply do not know they have been victimized while others rely on promises by the broker to make up their losses. However well-intentioned those promises may be, they rarely come true.
Mr. Kendall has been both in the securities industry for many years. He is currently both an investment adviser and a stockbroker (registered representative). As an investment advisor, he owes a fiduciary duty to customers. A fiduciary obligation exists whenever the relationship with the client involves a special trust, confidence, and reliance on the fiduciary to exercise his discretion or expertise in acting for the client.
In Arizona and California, Haynes Kendall is registered as an investment adviser meaning he owes a very high duty of care to clients in those states.
According to the Financial Industry Regulatory Authority (FINRA), Haynes Kendall has 35 years of experience in the financial world. He is currently working at the San Juan Capistrano branch of the Independent Financial Group. (Their less than stellar track record appears below.)
Kendall appears to wear many hats. Public records show that he sells securities part time while also serving as the CEO of a financial planning, real estate and mortgage business called Capital Financial Consultants, Inc. He also owns two other businesses, Edisto Diversified and 20 Hammocks LLC. Both are real estate management firms.
Kendall reported to FINRA that he is a Certified Financial Planner.
We are always concerned when a stockbroker or investment adviser tries to wear too many hats. While being a Certified Financial Planner can be helpful, running multiple businesses concerns us. A broker needs to diligently watch over a client’s accounts at all times.
What especially concerns us is a report that Kendall churned a customer’s accounts. That is why we are investigating him. If the allegations are true, this suggests Kendall is more interested in generating commissions for himself than generating returns for his customers. Each time a broker buys or sells a security, there is a cost to the customer. Excessive trades deplete the value of the customer’s account.
Public records show that Kendall was sued by a customer but that was decades ago. More recently another customer claimed being sold unsuitable investments.
Assuming the churning allegations are true, Independent Financial Group can be held responsible for Kendall’s misdeeds. Brokerage firms have a duty to supervise their employees and agents.
Is Haynes Kendall Really the CEO of Capital Financial Consultants?
While performing our due diligence on Haynes Kendall and Independent Financial Group, we looked into his claim that he is the CEO of Capital Financial Consultants. A company with that same name and address lists Larry Steckler as CEO. In fact, Kendall doesn’t appear anywhere on the site, not even in the list of team members. We wonder if he is even still there or at Independent Financial Group.
Either way, whoever employed Kendall at the time losses were incurred could be held liable if Kendall mismanaged his customers’ accounts.
Independent Financial Group
Independent Financial Group has been around since 1978. Their main office is in San Diego along with an office in San Juan Capistrano where Haynes Kendall is employed. All told, the company has over 600 financial advisors. In 2018, the company reported it had $2.7 billion under management.
According to its website, Independent calls itself “America’s Finest Broker – Dealer.” A recent charge by the SEC calls that slogan into question.
Less than a year ago, the SEC charged Independent Financial Group with breaches of fiduciary duty, a serious charge. According to the SEC,
“These proceedings arise out of breaches of fiduciary duty and inadequate disclosures by registered investment adviser Independent Financial Group, LLC in connection with its mutual fund share class selection practices and the fees it and its associated persons received pursuant to Rule 12b-1 under the Investment Company Act of 1940… [Between] January 1, 2014 and March 30, 2017 (the “Relevant Period”), Respondent purchased, recommended, or held for advisory clients mutual fund share classes that charged 12b-1 fees instead of lower-cost share classes of the same funds for which the clients were eligible. Respondent and its associated persons received 12b-1 fees in connection with these investments. Respondent failed to disclose… the conflicts of interest related to (a) its receipt of 12b-1 fees, and/or (b) its selection of mutual fund share classes that pay such fees. During the Relevant Period, Respondent and its associated persons received 12b-1 fees for advising clients to invest in or hold such mutual fund share classes.”
The SEC concluded Independent Financial Group “willfully violated” the Advisers Act, which makes it unlawful for any investment adviser, directly or indirectly, to “engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client.”
Rather than proceed to a hearing, Independent Financial Group settled by paying almost $1.5 million and agreeing to remedial sanctions.
In 2014, Virginia took action against the company after finding two of its brokers made unsuitable investment recommendations to customers.
Did You Lose Money with Independent Financial Group?
If you lost money at Independent Financial Group or with Haynes Kendall we can help. Even if you do not wish to pursue your losses, any information we gather may be useful in helping others. Did you work with Mr. Kendall? We want are happy to speak with you on a confidential basis.
If your broker’s bad advice cost you money, call contact us today for a free consultation. We may be able to help you recover your losses. You can reach one of our stockbroker fraud lawyers online, by email or by phone . Not quite ready to call or just looking for general information? Visit our investment fraud information page for general information.
*Simply because we are investigating a person or company does not mean they have engaged in wrongdoing. This investigation is, however, based on an actual report that we deem credible.