SEC Charges Father-Son Advisory Team With Fraud

What You Need to Know

A father and son who served as advisors and brokers for Waddell & Reed and Cambridge have been charged with fraud by the SEC.
The team allegedly impersonated clients in phone calls to their former firm to execute transactions in the clients’ accounts.
The SEC is seeking permanent injunctions and civil penalties against the pair.

A father and son who were fired from Waddell & Reed in 2021 have been charged with fraud by the Securities and Exchange Commission.

Kevin John Kane, 66, and Sean Michael Kane, 36, both of York, Pennsylvania, were terminated for cause from the dually registered advisor/broker-dealer on Feb. 23, 2021, the SEC said in a complaint, filed Wednesday in U.S. District Court for the Middle District of Pennsylvania.

The firm wasn’t identified by the SEC, either in its complaint or news release about it on Thursday.

But the firm was identified by the Financial Industry Regulatory Authority as Waddell & Reed, where the father was registered since 2013 and the son since 2018, according to their reports on FINRA’s BrokerCheck website.

LPL Financial completed a purchase of Waddell & Reed’s wealth management business from Macquarie Management Holdings for roughly $300 million in April 2021.

The SEC’s complaint also alleged that, following their terminations, to persuade some of their clients to join them at their new firm, the Kanes falsely represented to clients that they left their former firm voluntarily.

The team moved to Cambridge Investment Research and are still affiliated with the firm, according to BrokerCheck.