Sylvester King Kr. of Miramar, Florida submitted a Letter of Acceptance Waiver (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly concealing loans to customers participating in undisclosed private securities transactions and providing false information to his employer.
In 2009 King and his partner formed PKG, a d/b/a branch office located in Fort Lauderdale, Florida that was registered with Morgan Stanley and later Wells Fargo. PKG provided financial “concierge” services to professional athletes that played in the NFL and NBA. FINRA found that from November 14, 2011 through January 23, 2012, King assisted his partner in loaning approximately $399,500 to three professional athletes in the NFL and NBA who were also Wells Fargo customers. FINRA alleged that separate accounts were made and various wiring techniques were used to conceal the loans from Wells Fargo and its reporting requirements.
FINRA further alleged that from May 2012 through November 2012, while registered with Wells Fargo, King loaned $25,000 to a friend who was also a customer of the firm. Wells Fargo’s procedures prohibited loans to a firm customer unless the customer was an immediate family member of the representative. The client was not an immediate family member of King and thereby he violated FINRA Rules 3240 and 2010 with the execution of the loan.
In addition, FINRA found that King participated in a private securities transaction regarding GVC, a startup internet branding company without his firm’s written approval. Approximately eight clients purchased nearly $3.08 million of GVC stock. FINRA alleged that King facilitated the transactions by forwarding and retrieving documentation from investors and do so without prior written notice and approval to his FINRA member firm consequently violating NASD Conduct Rule 3040 and FINRA Rule 2010. King also allegedly falsely represented Morgan Stanley in compliance questionnaires for which he stated he did not participate in any private securities transactions.
As a result of his conduct, King was ordered to pay a $35,000 fine and was suspended from association with any FINRA member in any capacity for a period of 18 months.
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 Morgan Stanley and Wells Fargo 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 Morgan Stanley and Wells Fargo 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 Morgan Stanley and Wells Fargo, which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your Morgan Stanley or Wells Fargo 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.