Aaron Parthemer of Fort Lauderdale, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Agency (FINRA) for the purpose of settlement for allegedly engaging in several outside business activities without his firm’s prior written knowledge.
Parthemer first became registered with FINRA as a General Securities Representative (GSR) in October 1994. From June 2009 through October 2011, Parthemer was registered with Morgan Stanley Smith Barney LLC (Morgan Stanley) as a GSR. On November 4, 2011 Morgan Stanley filed a Uniform Termination Notice for Securities Industry Registration (Form U5) under Parthemer’s request. From October 21, 2011 to present, Parthemer has been registered through Wells Fargo Advisors, LLC (Wells Fargo) as a GSR.
Without admitting or denying the findings, Parthemer consented to the FINRA sanction and entry findings that he loaned approximately $399,500 to customers without his firm’s permission. FINRA alleged that between June 2009 and March 2013, while associated with Morgan Stanley and later Wells Fargo, Parthemer, not only gave out loans without his firm’s permission but also presented an undisclosed private securities transaction in which eight firm customers ultimately invested more than $3 million. In addition, FINRA alleged that on multiple occasions, Parthemer provided false information to his associated firms.
FINRA found, between November 2011 and January 2012, while registered with Wells Fargo, Parthemer loaned approximately $399,500 to three professional athletes who were owners of a nightclub and customers of Parthemer at Wells Fargo. The purpose of the loan was to cover expenses at the night club. However at the time, Wells Fargo procedures prohibited loans to a firm’s customer unless the customer was an immediate family member of the representative and the loan was not securities related. FINRA alleged that Parthemer without his firm’s approval, provided the loan even though the customers were unrelated to him and the loans were not securities related. As a result Parthemer violated FINRA Rules 3240 and 2010.
In addition, from approximately July 2009 through February 2012, Parthemer allegedly participated in private securities transactions that are not prohibited by any person associated with a FINRA member. Parthemer allegedly referred several of his NBA and NFL clients to participate in a private securities transaction for GVC, a startup internet branding company managed by a friend of Parthemer. Approximately eight of Parthemer’s clients purchased $3.08 million of GVC preferred stock. FINRA alleged that Parthemer “facilitated” these transactions without his firm’s approval or knowledge violating FINRA Rule 2010.
For his alleged conduct, Parthemer was barred from association with any FINRA member in any capacity.
Stockbrokers have been known to engage in many types of practices which violate industry and firm rules, practices, and procedures. In order to protect customers from stockbroker misconduct, FINRA rules require broker-dealers like Wells Fargo or Morgan Stanley to establish and implement a reasonable supervisory system. The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and the firms, such as Wells Fargo or Morgan Stanley’s own policies and procedures. If broker dealers and/or their supervisors do not establish and implement these protective measures, they may be liable to investors for damages which flow from the misconduct. As a result, investors who have suffered losses because of their stockbroker’s unlawful or prohibited conduct can file a claim to recover damages against broker dealers like Wells Fargo or Morgan Stanley, which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your Wells Fargo or Morgan Stanley investment account due to your stockbroker’s misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against stockbrokers for unsuitable recommendations, misrepresentations, and/or other unauthorized and prohibited conduct.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.