FINRA Sanctions Former LPL Broker for Misrepresenting Corporate Bonds as FDIC-Insured CDs

The Financial Industry Regulatory Authority (FINRA) has sanctioned former LPL Financial broker Kyle Ray Critcher (CRD #7351555) after finding he negligently misrepresented the nature of investments he recommended to senior customers. According to FINRA, Critcher falsely described corporate bonds as FDIC-insured certificates of deposit (CDs), a misstatement that materially altered the risk profile of the investments he recommended.

The matter was resolved through a Letter of Acceptance, Waiver and Consent (AWC), in which Critcher consented to FINRA’s findings without admitting or denying them.

Alleged Misrepresentation of Investment Risk

According to FINRA, the misconduct occurred in July 2024 and involved two senior customers, a husband and wife, who contacted LPL Financial seeking to purchase FDIC-insured CDs. The call was routed to Critcher, who instead recommended that the customers purchase more than $500,000 in corporate bonds.

FINRA found that Critcher negligently misrepresented a material fact by claiming that the corporate bonds were FDIC-insured. Corporate bonds are not insured by the FDIC, and FINRA stated that Critcher should have known the investments did not carry that protection. The bond purchases also factored into Critcher’s compensation, a detail FINRA cited in its findings.

Shortly after the transactions were completed, the customers contacted LPL Financial to complain. The firm reversed the corporate bond purchases and executed the customers’ original request to purchase CDs.

FINRA concluded that Critcher’s conduct violated Section 17(a)(2) of the Securities Act of 1933, which prohibits obtaining money or property through materially misleading statements, and therefore violated FINRA Rule 2010, which requires brokers to observe high standards of commercial honor and just and equitable principles of trade.

To resolve the matter, Critcher agreed to a three-month suspension from associating with any FINRA member in all capacities, along with a $5,000 fine and a requirement that he requalify by examination before acting again as a General Securities Representative.

Why This Matters for Investors

Investors who seek FDIC-insured products are typically prioritizing capital preservation and low risk. CDs offer a government-backed guarantee that does not apply to corporate bonds, which are subject to credit risk and market fluctuations.

When a broker misrepresents an investment as FDIC-insured, investors may unknowingly assume risks they specifically intended to avoid. That risk is especially acute for senior investors who may rely heavily on a broker’s description of safety features when making investment decisions.

This case highlights the importance of verifying how an investment is structured and whether the protections being described actually apply. Reviewing written disclosures and trade confirmations can help identify discrepancies before losses occur.

Discuss Your Situation With Sonn Law Group

If your broker described an investment as FDIC-insured or guaranteed when it was not, or if you believe material facts about risk were misrepresented, you may want to have your accounts independently reviewed.

The Sonn Law Group represents investors nationwide in matters involving misrepresentations, unsuitable investments, and other forms of broker misconduct. We handle cases on a contingency-fee basis, meaning you pay nothing unless we recover compensation for you.

To request a confidential case review, call 833-912-3000 or complete our online consultation form.