A dually registered investment advisor in Gloucester, Mass., who was barred by Finra last year has now been booted from the industry by the SEC for the same violations: her alleged participation in a supervisor’s scheme to speculatively trade on unfunded deposits to his LPL Financial brokerage account.
The most recent disciplinary action against Kerry Lee Broderick, 36, came yesterday from the SEC, when it barred Broderick without imposing a monetary penalty following the agency’s investigation into the activities of her supervisor, Andrew M. Komarow.
Komarow was charged last December with making $6.9 million in false deposits at four different broker-dealers and trading on the accounts before their unfunded status was detected.
Broderick was working at LPL Financial in December 2022 when Komarow started making unfunded transfers of money from his bank account to his personal brokerage account at LPL and speculatively trading with the resulting credits before the transfers were cancelled due to insufficient funds, according to the SEC. This illegal activity is called “free-riding.”
In three separate transactions on Dec. 1 and 2, 2022, Komarow allegedly transferred $3 million to his LPL brokerage account despite having only $100 or less in his bank account at the time, the SEC said. He then exploited the “immediate access” he had to the funds to make speculative trades that racked up more than $3 million in losses for the firm.
He did this by using Broderick’s log-in credentials to initiate the trades and then instructed Broderick to confirm that she had initiated the trades when contacted by LPL, according to the SEC.
“When Broderick asked Komarow questions via the chat about how much money she should say was coming in, Komarow told her to ‘say more than he needs, say 900k’ and say whatever it took to get LPL ‘not to call again.’ Broderick assured [LPL] that the money was coming when that was not true,” the SEC said of what transpired on Dec. 1.
Then later that day, Komarow also asked Broderick to call in orders for other trades, offering her a bonus if she did so and saying she should, “lie, whatever you have to do, to get those trades placed,” the SEC said.
“Through multiple calls with [LPL], Broderick was able to get most of Komarow’s trades processed. Broderick also put in additional trade orders on the phone at Komarow’s request without confirming the orders were properly funded,” the SEC said.
The SEC said that when Broderick spoke to other reps at LPL to initiate Komarow’s trades, she assured those reps that the trades were funded and should be processed.
“When Broderick participated in those calls, she knew, or was reckless in not knowing, or should have known that the information she was communicating to [LPL] was false,” the SEC said.
Broderick had been permanently barred by Finra on Nov. 28, 2023, for refusing to appear for testimony in that authority’s investigation into the allegations that she violated her firm’s policies by helping Komarow in his activities.
Broderick worked at LPL Financial from Nov. 5, 2021, to Jan. 11, 2023, and at Royal Alliance Associates for less than a month from Dec. 16, 2022, to Jan. 4, 2023, according to BrokerCheck. Both firms had filed Form U5s saying she had voluntarily resigned from the firms, Finra said.