Forked River Stockbroker Sanctioned For Private Securities Transaction
Jesse Todd Kovacs of Forked River New Jersey a stockbroker formerly employed by ON Equity Sales Company has been suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that Kovacs took part in private securities transactions without permission from ONESCO. Letter of Acceptance Waiver and Consent No. 2019062253101 (Aug. 26, 2020).
According to the AWC, two customers had been introduced by Kovacs so that the one customer would loan the other customer’s business money. The stockbroker had coordinated and hosted meetings between the customers. FINRA stated that the loan terms had been negotiated in a second meeting. The AWC indicated that the negotiations resulted in the customer’s March 28, 2018 liquidation of ONSESCO assets and a subsequent loan of $150,000.00 to the business. This was memorialized in a promissory note paying the customer 15 percent annually with repayment over 18 months.
The AWC stated that from 2018 to 2019, Kovacs corresponded with customers regarding the promissory note. The stockbroker discussed making amendments to the promissory note terms in light of the customer’s concerns about the other’s failure to repay.
This promissory note was determined by FINRA to be a security which meant that Kovacs was facilitating a private securities transaction. Kovacs was required to furnish written notification to ONESCO regarding his involvement in the promissory note transaction. The AWC indicated that the securities broker dealer was never informed by Kovacs about his activities. FINRA determined that the stockbroker violated FINRA Rules 2010 and 3280.
Kovacs has been identified in three customer initiated investment related disputes concerning allegations of his wrongdoing while he was registered with Securian Financial Services, Hornor Townsend Kent and ONESCO. FINRA Public Disclosure reveals that a customer initiated investment related complaint involving Kovacs’s activities was resolved for $25,000.00 in damages supported by accusations that it was not suitable for the Securian Financial Services customer to be invested in a variable annuity that exposed the customer to risks from stock market volatility.
On June 29, 2016, another customer filed an investment related complaint regarding Kovacs’s activities in which the customer requested unspecified damages based upon allegations of fees being concealed by the stockbroker as it pertained to a variable annuity that was sold to the customer when Kovacs was associated with Hornor Townsend Kent. Kovacs is also referenced in a customer initiated investment related arbitration claim which was settled for $85,000.00 in damages founded on accusations of bad advice as it concerned the customer’s promissory note transaction. FINRA Arbitration No. 19-00922 (May 11, 2020).
On May 31, 2019, Kovacs was discharged by ONESCO supported by allegations of his failure to comply with the policies of the securities broker dealer as it pertained to private securities transactions. Since August 23, 2019, the stockbroker has been employed by PTS Brokerage LLC.