← Broker database 2021-11-03
Patrick Charles Kincheloe Barred for Refusing to Testify About Unregistered Person Involvement
According to FINRA, Patrick Charles Kincheloe was barred from association with any FINRA member in all capacities for refusing to provide on-the-record testimony requested by FINRA during its investigation.
The investigation originated from a Form U5 filed by Kincheloe's firm after terminating his registration. The firm alleged that Kincheloe involved an unregistered person in activities that required securities registration. This is a serious allegation because it suggests potential circumvention of registration requirements that exist to protect investors by ensuring that anyone involved in securities sales meets competency and ethical standards.
Initially, Kincheloe cooperated with FINRA's investigation. However, at some point he ceased cooperating and ultimately refused to provide on-the-record testimony. This refusal prevented FINRA from investigating the circumstances of the alleged involvement of unregistered persons and determining what actually occurred.
The registration requirements in the securities industry serve critical investor protection functions. Individuals who sell securities or provide investment advice must register with FINRA and pass qualifying examinations demonstrating their knowledge of securities laws, ethical standards, and industry practices. They must also disclose their background, including any criminal history, regulatory actions, or customer complaints. By involving unregistered persons in activities requiring registration, registered representatives can help those persons avoid these requirements and oversight, potentially exposing investors to individuals who lack qualifications or have undisclosed problems in their backgrounds.
Refusing to testify about such allegations is treated as an independent violation that warrants a bar from the industry. FINRA's ability to investigate potential misconduct and protect investors depends entirely on the cooperation of registered persons. When someone refuses to testify, they prevent FINRA from determining what happened and assessing risk to investors.
For investors, this case reinforces the importance of verifying that anyone who sells them securities or provides investment advice is properly registered. This can be checked through FINRA's BrokerCheck system. If someone is working with an unregistered person, or if a registered representative is barred for refusing to answer questions about involving unregistered persons, these are serious red flags that should cause investors to take their business elsewhere.