The Financial Industry Regulatory Authority (“FINRA”) recently fined and suspended former New Jersey-based broker Manish H. Shah relating to loans he took out from clients. According to FINRA, Shah borrowed money from clients to purportedly buy another practice, but instead spent the money personal debt and expenses, as discussed in a recent news article.
He borrowed $75,000 from a brokerage customer in July 2016 and $200,000 from an insurance client in July 2018. According to FINRA, Northwestern Mutual fired Shah in 2019 after placing him under internal review for “borrowing money from a client and other potential misconduct.”
FINRA imposed a 20-month suspension and $15,000 fine on Shah.
FINRA rules expressly prohibit brokers from taking loans from customers unless they have received firm approval. Brokers must also comply with FINRA’s Rule 2010, which requires “high standards of commercial honor.”
Fishman Haygood’s Investment Fraud Division monitors regulatory actions against brokers and investment advisors across the nation. If you believe you have suffered losses due to the advice and/or actions of your financial representative, please contact us to discuss your possible claim.