The Financial Industry Regulatory Authority Inc. has barred broker Aaron Parthemer, a Wells Fargo (WFC) adviser, for taking part in a number of outside businesses and failing to disclose his involvement. FINRA has tight regulations that don’t allow brokers to take part in private securities transactions without notifying their firm and getting authorization. Parthemer, who used to be at Morgan Stanley Wealth Management (MS) until four years ago, has advised numerous NBA and NFL athletes.
According to the SRO, he falsely represented, in compliance questionnaires he filled out while with both firms, that he was not taking part in external business activities that warranted disclosure. He also gave FINRA false data when the regulator started to ask for more information about external business activities in 2012.
Parthemer allegedly did not disclose the part he played in running Club Play, which used to be a South Beach, Florida nightclub, as well as his involvement in a tequila marketing operation and an Internet branding startup. FINRA also contends that the broker made unapproved loans to clients in connection with the club and referred clients to invest in the start up.
He also allegedly managed operations at Club Play until two years ago and loaned close to $400,000 to three professional athletes that had ownership stakes at the club and to Wells Fargo customers. The loans were to cover the club’s operating costs and violated the firm’s policy, which prevents brokers from lending funds to clients.
While working at both firms, Parthemer is accused of persuading a number of his professional athlete clients to invest over $3 million in the branding company that a friend of his ran.
FINRA released the terms of the settlement with Parthemer in a letter this week. He accepted the bar but did not deny or admit to the findings. A lawyer representing Parthemer said that he was never an owner of the club and he did not get any compensation from the external businesses.
If you suspect that you were the victim of broker fraud, do not hesitate to contact our stockbroker fraud law firm immediately.
Finra bars Wells Fargo broker who ran Miami nightclub, Investment News, April 23, 2015
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