Wells Fargo Broker Banned for Undisclosed Business Interests

Wells Fargo Broker Banned for Undisclosed Business Interests

Aaron Parthemer, a Wells Fargo adviser, has been barred by the Financial Industry Regulatory Authority Inc. (FINRA) for engaging in a number of undisclosed businesses, including running a dance club in South Beach, Fla., plus running an Internet branding startup and a tequila marketing operation.

Undisclosed loans and business involvements

FINRA alleges that Parthemer managed operations at the club, and loaned just under $400,000 to three professional athletes who were owners at the club. The loans were to pay for operating expenses at the club, but they violated Wells Fargo’s policy against brokers lending money to clients.

James Sallah, an attorney representing Parthemer, said his client was not an owner of the club, and never received compensation from the outside businesses. Sallah also claims that Parthemer is still owed money on some of the loans.

Unauthorized private securities transactions

The letter of settlement states that Parthemer referred eight of his NFL and NBA clients to invest more than $3 million in an Internet branding company referred to as “GVC,” which was run by a friend. These incidents allegedly occurred from 2009 to 2012, while Parthemer worked at Morgan Stanley and subsequently at Wells Fargo.

FINRA claims that while the referrals did not result in damage to clients, the regulator’s strict rules prohibit brokers from participating in any private securities transactions without authorization and disclosure to their firm.

False representations to FINRA

According to FINRA, in his compliance questionnaires to Morgan Stanley and Wells Fargo, Parthemer falsely represented that he was not participating in any outside business activities that required disclosure.

FINRA further claims that Parthemer provided false information to FINRA when the regulator began to request more information about his outside business activities in 2012.

The team of investment fraud lawyers at Starr Austen & Miller LLP fights for the protection of investors and handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence and breach of trust.

Source: Investment News