Gana LLP is investigating new customer complaints filed with the Financial Industry Regulatory Authority (FINRA) against broker Aaron Robert Parthemer (Parthemer). Our firm has been investigating Parthemer since 2015, when Parthemer was barred from FINRA for engaging in private securities transactions, also known as “selling away”. According to FINRA’s BrokerCheck records for Parthemer, there are 4 new disclosures on his record since his last regulatory action in 2015. These disclosures including customer complaints against Parthemer alleging unsuitable and unauthorized investments, and misrepresentation. Parthemer was barred permanently from FINRA on April 2015. His registration to the New Jersey Bureau of Securities, a self-regulatory organization, was revoke in September 2015.
The most current customer complaint pending against Parthemer is from May 2017, alleging Parthemer made unsuitable investments starting in 2009 when Parthemer was employed at Wells Fargo Advisors and Morgan Stanley Smith Barney. During Parthemer’s stint at Morgan Stanley, the client alleged that Parthemer presented outside investment opportunities that he had a personal interest in, which was unauthorized by the firm. The customer alleged damages of $1,622,844.00.
A second customer complaint was submitted in September 2016 regarding Parthemer’s actions while employed at Morgan Stanley Smith Barney. The customer alleged that Parthemer solicited the client to invest in outside investments that were not authorized by Morgan Stanley. The alleged damages are $205,000.00 and is still pending.
The third customer complaint was lodged in July 2016 alleging that Parthemer solicited outside investment opportunities not authorized by Morgan Stanley Smith Barney and made unsuitable recommendations. This complaint is still pending for the alleged damages of $7,818,162.85.
A fourth customer complaint filed in June 2016, alleged that the investments Parthemer recommended between 2011 and 2015, while he was employed at Wells Fargo Advisors and Morgan Stanley Smith Barney, were misrepresented and unsuitable. The specific investment in question was Global Village Concerns, Inc. The dispute also alleged that from June 2009 to October 2011, Parthemer recommended an investment that was not authorized by Morgan Stanley Smith Barney.
Parthemer entered the securities industry in 1994. These are the following firms Parthemer has been associated with throughout his career:
• Wells Fargo Advisors (October 2011 – May 2015)
• Morgan Stanley Smith Barney (June 2009 – November 2011)
• Citigroup Global Markets, Inc. (November 2006 – June 2009)
• Banc of America Investment Services, Inc. (April 1998 – November 2006)
• Barnett Investments, Inc. (May 1997 – April 1998)
• Merrill Lynch, Pierce, Fenner & Smith, Inc. (October 1995 – March 1997)
• L.C. Wegard & Co., Inc. (October 1994 – October 1995)
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.
False representations include either written or oral statements containing misrepresentations or omissions of information that are material to an investor and induce the purchase, sale, or holding of a security. Under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and Rule 10b-5 a misrepresentation or omission of a fact is material if a reasonable investor might have considered the fact important in the making of the investment decision. Also the Financial Industry Regulatory Authority (FINRA) Rule 2020 also prohibits members from effecting “any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.”
Gana LLP’s investment fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to claims of unsuitability and misrepresentation. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.