The firm is luring clients by reducing interest rates on mortgages by as much as half a percent.
Agency's inquiry follows SEC and Finra investigations into private placement firm, which has raised $1.8 billion from wealthy investors.
Chairman says management is 'rock solid' despite the departure of CEO Robert Moore.
Merrill embraces it, while Wells Fargo has moved away from the practice.
The broker, Bruce Worthington, allegedly took nearly $100,000 from client's account over 13 years.
CEO Robert Moore's resignation signals further adjustments at the IBD network.
Chairman Ben Brigeman will serve as interim chief executive while a search for a permanent CEO is conducted.
Sources say Kestra is being valued at between $600 million and $800 million, about eight to 10 times EBITDA.
Arbitration claim accuses well-known adviser of actions that resulted in excessive fees.
Floyd Powell received $104,000 in commissions from the transactions.
