NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

Patrick Shawn Kennedy (Supervisor)
AWC/2009018671501

Kennedy continued recommending and effecting put options trading in a customer’s account even though he knew that the trading was unsuitable because the customer was unemployed and the risk was inconsistent with the customer’s financial resources, investment objectives and risk tolerance.

Kennedy recommended that an elderly couple invest $50,000 in a put options trading strategy with approximately $57,000 to be invested in mutual funds and bonds with none of the mutual funds to be used for put options trading. The customers’ account, which had approximately $267,298.55, suffered realized and unrealized losses of $195,046.40 due to Kennedy’s put option trading strategy and the liquidation of mutual funds to cover losses from the put options trading and to meet margin requirements of securities that were purchased in the customers’ account due to the put options trading.

Patrick Shawn Kennedy (Supervisor): Fined $5,000; Suspended 9 months

Tags: Options  Elderly