Michael Milad Tanha of Los Angeles, California submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for allegedly engaging in outside business activities and unapproved private transactions in violation of NASD Rule 3040 and FINRA Rules 3270, 3280 and 2010.
From October 2014 to June 2017, Michael Milad Tanha was registered with Merrill Lynch as an Investment Company Products/Variable Contracts Representative and a General Securities Representative. According to the FINRA findings, Tanha engaged in five outside business activities and participated in private securities transactions totaling $500,000 without notice or approval from his firm. The FINRA findings stated that Tanha co-founded a corporation created to enable its clients to communicate with celebrities on social media for a fee and was responsible for marketing, capital raising, and working with lawyers and accountants to incorporate Entity A and pay its taxes. The findings stated that in connection to the transactions, Tanha received commissions, referral fees and introduction fees. In addition to those FINRA findings, Tanha allegedly falsely attested that he did not recommend or refer any sales, purchases, or private securities transactions on the compliance questionnaire submitted to Merrill Lynch without approval.
FINRA Rule 3270 states, in relevant part, that no registered person may be an employee, independent contractor, sole proprietor, officer, director or partner of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his or her member firm, unless he or she has provided prior written notice to the member, in such form as specified by the member.” A violation of FINRA Rule 3270 is inconsistent with high standards of commercial honor and just and equitable principles of trade, and is also, therefore, a violation of FINRA Rule 2010.
FINRA Rule 3280, like its predecessor NASD Rule 3040, prohibits associated persons from participating in any manner in private securities transactions without providing prior written notice to their member firm. Violations of NASD Rule 3040 and FINRA Rule 3280 arc inconsistent with high standards of commercial honor and just and equitable principles of trade, and arc also, therefore, violations of F1NRA Rule 2010.
Without admitting or denying FINRA’s findings, Michael Milad Tanha was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for 10 months. The suspension was in effect from May 6, 2019, through March 5, 2020.
Stockbrokers have been known to engage in many practices that may violate industry and firm rules, practices, and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of these industry rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, and the brokerage firm’s own policies and procedures. If broker-dealers and/or their supervisors fail to establish and implement these protective measures, they may be liable to investors for damages which flow from the broker’s misconduct. Therefore, investors who have suffered losses stemming from outside business activities, private transactions and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like Merrill Lynch, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your Merrill Lynch account due to unapproved private transactions by your broker? Was Michael Milad Tanha your stockbroker? 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 Merrill Lynch stockbrokers who may have engaged in broker misconduct and caused investors’ losses.
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 visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.