A well-known Hilo securities broker and financial adviser has been barred by the Financial Industry Regulatory Authority from acting as a broker.
A well-known Hilo securities broker and financial adviser has been barred by the Financial Industry Regulatory Authority from acting as a broker.
According to the FINRA Broker Check website, John K. Kai, who spent 25 years in the securities industry, was barred Tuesday from “associating with firms that sell securities to the public.”
That comes after he was suspended indefinitely July 3 for failing to respond to a June 9 request by the agency for information.
According to the federal Securities and Exchange Commission’s website, Kai also was previously registered as a financial adviser, but is no longer registered.
The Broker Check site said the 51-year-old Kai was terminated April 19 from his position as a branch manager of First Allied Securities Inc., where he had been employed since August 2010, for allegedly “violating numerous firm policies, including … undisclosed private securities transaction and outside business activity, borrowing funds from a client, and exercising discretion in client brokerage accounts without the firm’s approval.”
Kai is alleged “to have received client funds under the false pretense of investing the funds for the client without any apparent account opened under the client’s name,” the site states. No dollar amount was specified.
It’s not the first time Kai ran afoul of a client or employer, according to FINRA.
On July 31, 2010, he was “permitted to resign” from a position with Commonwealth Financial Network after an allegation his “usage of social media was in violation of firm policy.”
On Feb. 21, 2010, a customer complained that Kai made unsuitably risky investments with the investor’s funds and sought $37,000 in damages. The complaint was settled for $20,000, according to FINRA.
According to the site, Kai responded that the “customer suggested that portfolio was too ‘risky’ despite choosing the highest risk/reward category on his investor profile …”
Kai was hired by Commonwealth on Nov. 2, 2006, according to the site.
According to FINRA, Kai also was employed by Linsco/Private Ledger Corp. from July 6, 1999-Nov. 7, 2006. The start time roughly coincides with Kai’s opening shop under his own banner, Pinnacle Investment Group LLC, according to the state Department of Commerce and Consumer Affairs website. Pinnacle is still an active trade name, according to DCCA, but the business is listed as “not in good standing” for not submitting its 2017 annual filing.
Kai is listed as president and only member of Pinnacle. For years, Kai did brief financial tips on the radio in Hilo every weekday morning using the Pinnacle name.
He also was employed by Painewebber from June 28, 1995-July 22, 1999, and Merrill Lynch, Pierce Fenner &Smith from Nov. 18, 1991-June 26, 1995, according to FINRA.
Kai also has been active in business and community affairs and local Republican politics.
He was appointed in June 2004 by former Gov. Linda Lingle as an interim member of the University of Hawaii Board of Regents representing the Big Island. His nomination was rejected by the state Senate in April 2005, but he served as a regent for 10 months and is listed as a regent emeritus on the University of Hawaii website.
He also is a former board member of Royal Hawaiian Orchards, formerly ML Macadamia Orchards. Kai also was named interim president and CEO of the company in June 2013 after the board fired former president and CEO Dennis Simonis.
Kai also served on Lingle’s East Hawaii Advisory Commission and on the boards of Hospice of Hilo, Hawaii Island Chamber of Commerce and other nonprofit organizations.
Kai was contacted but didn’t comment on the specifics of the case.
Email John Burnett at jburnett@hawaiitribune-herald.com.