Jesse Kovacs Disclosures
Jesse Kovacs has been in the securities industry since 2006. Before joining PTS Brokerage in 2019, Kovacs worked for The O.N. Equity Sales Company, Hornor, Townsend & Kent, Inc., and other broker-dealers.
Kovacs has 6 disclosures on his publicly-available FINRA BrokerCheck report:
August, 2020: A regulatory filing resulted in Kovacs being suspended for three months, and states “Without admitting or denying the findings, Kovacs consented to the sanction and to the entry of findings that he participated in a private securities transaction without providing prior written notice to his member firm. The findings stated that Kovacs introduced two of his customers at the firm for the purpose of negotiating a loan from the first customer to a business owned by the second customer. The introductory meeting was held at Kovacs’ office and he was present. Kovacs was also present at a second meeting between the customers while the terms of the loan were being negotiated. The first customer made a $150,000 loan to the second customer’s business pursuant to a promissory note, in which the second customer and his business promised to repay the first customer $150,000, plus 15% annual interest, in 18 monthly installments. The first customer sold securities in her firm account in order to fund the loan. The promissory note was a security. Additionally, Kovacs periodically relayed communications between the customers about the securities transaction. Kovacs communicated the first customer’s concerns about late and missed payments and provided advice to the second customer about potential amendments to the terms of the promissory note. Ultimately, the first customer was not repaid in full and filed an arbitration against Kovacs and his firm.”
January, 2020: A tax judgment/lien disclosure in the amount of $52,619.47 is disclosed.
May, 2019: Kovacs was discharged from The O.N. Equity Sales Company for a violation of the firm’s policy on private securities transactions.
April, 2019: A customer dispute alleged that Kovacs recommended that she invest $150,000 “from her brokerage account into a promissory note held by another individual who owned auto body shop”. The case was settled for $85,000.
June, 2016: A customer dispute alleged that Kovacs did not disclose any of the fees associated with a variable annuity purchase.
April, 2009: A customer dispute stated “client alleges that it was not her intent to purchase a product that would expose her investment to the fluctuations of the stock market.” $92,000 in damages were requested, and the case settled for $25,000.
Selling Away Prohibited
The activity Kovacs is alleged to have participated in is known as selling away. Brokers are required to disclose outside business activity and get prior approval before they conduct a transaction away from the firm. Oftentimes they do not because they know it won’t be approved, and motivated by the compensation they’ll receive, they push the transaction on their clients.
Jesse Kovacs is accused of facilitating a private promissory note transaction between clients. Promissory notes are a common investment vehicle in cases of selling away, as are unregistered securities, and real estate investments. Broker-dealers are responsible for monitoring the activity of their clients and uncovering unapproved outside activity. FINRA arbitration claims may be made against the brokerage firm the broker was working for when selling away occurred.
We have seen a rise in stockbroker disputes involving financial advisors recommending that clients invest in companies or deals that the financial advisor has a personal interest in. This is generally prohibited by FINRA and most brokerage firms, at a minimum, require financial advisors disclose all outside business activities. A brokerage firm has a duty to supervise these actions. As best practices, these types of activities are prohibited.
If your financial advisor recommends that you invest directly in a company that the stockbroker has an interest in or the investment does not appear on your account statements, your financial advisor may be violating FINRA rules and regulations and the brokerage firm may be liable for failure to supervise or other misconduct. Silver Law Group represents investors who have lost money because of selling away, improper loans and elder financial fraud.
Recover Jesse Kovacs Losses Through FINRA Arbitration
Silver Law Group is a nationally-recognized FINRA arbitration and investment fraud law firm with experience recovering selling away losses for investors.
Scott Silver, Silver Law Group’s managing partner, is the chairman of the Securities and Financial Fraud Group of the American Association of Justice and represents investors across the country in securities investment fraud cases. If you have investment losses, contact Scott Silver at ssilver@silverlaw.com or toll free at (800) 975-4345 for a no cost consultation to discuss your options.