Niyukt Raghu Bhasin, a former Wellington, Florida-based Registered Principal and founder, owner, President and CEO of West Palm Beach, Florida-based NSM Securities, Inc., was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that the firm failed to create and enforce a supervisory system which resulted in many of the firm’s customers suffering significant investment losses. The complaint alleges that Bhasin’s non-compliance resulted in aggressive, unauthorized trading, numerous customer complaints and cold-calling abuses. Two of the firm’s Registered Representatives, West Palm Beach, Florida-based Shondeep Sajan Balchandani and Naveen K. Bhagwani allegedly engaged in churning and excessive trading, and made unsuitable recommendations to NSM Securities customers. FINRA’s complaint even goes so far as to refer to NSM Securities’ supervisory system as “grossly inadequate.”
According to the FINRA complaint, NSM Securities, Mr. Balchandani and Mr. Bhagwani were in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Further, NSM Securities is liable for the alleged fraudulent misconduct of Mr. Balchandani and Mr. Bhagwani, which includes, in the case of Mr. Bhagwani, the alleged falsification of documents and forgery of customers’ signatures. Further, the FINRA complaint alleges that Mr. Bhasin failed to report customer complaints, failed to disclose some of his Form U4 information, and that his firm’s “grossly inadequate” supervisory system failed to prevent telephone solicitations to people with numbers which were on the firm-specific and national do-not-call lists.
Stockbrokers, registered representatives, and other financial industry professionals have been known to engage in many types of fraudulent and unlawful behavior which are in violation of industry rules and procedures. In order to protect customers from broker misconduct, FINRA rules require brokerage firms to establish and implement a reasonable supervisory system. The implementation of the rules requires supervisors to monitor its employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for losses flowing from the employees’ misconduct. As a result, account holders who have suffered losses stemming from a broker’s unauthorized and excessive trading, forgery, and/or unsuitable recommendations by their broker or registered representative can bring forth claims to recover damages against broker-dealers like NSM Securities, which have a duty to supervise its employees in order to prevent these types of misconduct.
Have you suffered losses in your investment account due to your registered representative or stockbroker’s unauthorized, excessive trades, unsuitable recommendations, or other 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 financial professionals for unsuitable recommendations, and/or other unauthorized and fraudulent misconduct.
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 , 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.