- February 8, 2021
- Northwestern Mutual Investment Services, LLC
Manish Shah (CRD#: 4652835), also known as Manish H. Shah and Manish Hemant Shah, is a previously registered Investment Advisor who worked for Northwestern Mutual Investment Services, LLC from 2003 until 2019.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in January 2021, FINRA suspended Manish Shah for 20 months beginning February 1, 2021, and he is required to pay a civil penalty/fine of $15,000.
The FINRA sanction states, “Without admitting or denying the findings, Shah consented to the sanctions and to the entry of findings that he borrowed $75,000 from one of his brokerage customers without providing notice to his member firm or obtaining its approval for the borrowing arrangement. The findings stated that Shah documented the terms of the loan in a loan agreement and repayment schedule. Shah failed to repay the loan in accordance with the repayment schedule. Although Shah told the brokerage customer that he would use the money to buy another registered representative’s book of business, he did not do so but used it mostly for personal expenses. Following Shah’s termination from the firm and a complaint by the brokerage customer to the firm regarding the loan, Shah repaid the customer. In addition, Shah completed firm compliance questionnaires in which he falsely represented that he had not borrowed money or securities from or lent money or securities to a client. The findings also stated that Shah circumvented his firm’s policies, provided false information to a client’s representative, and misled the firm during its internal investigation in connection with Shah borrowing $200,000 from an insurance customer without disclosing to or obtaining approval from the firm. Shah documented the terms of the loan in a loan agreement and repayment schedule. Although Shah told the insurance customer that he would use the proceeds to buy another registered representative’s book of business, he did not do so but used the proceeds mostly to retire other debt and for personal expenses. The insurance customer, through her accountant, asked Shah to provide documents showing that the loan was properly collateralized. In an email response, Shah sent an altered document that listed the insurance customer as a beneficiary on his personal life insurance policy. However, that policy had lapsed, and the insurance customer had never been listed as a beneficiary. In addition, Shah sent an inaccurate balance sheet to the accountant. That balance sheet included bank account balances that were inflated and also understated Shah’s liabilities. After the insurance customer complained to the firm, it began an internal review. Although Shah admitted he borrowed from the insurance customer, he had previously told the firm that he had not borrowed money from any other clients, which was not true. In addition, in response to the firm’s request for documents and communications, Shah forwarded the firm emails between him and the accountant but failed to provide the email response to the accountant and the accompanying falsified documents. Shah further stated, inaccurately, that no other responsive documents existed. Ultimately, Shah repaid the insurance customer $70,277 and the firm entered into a settlement agreement for the outstanding loan balance plus interest and attorney’s fees.”
For a copy of Manish Shah’s FINRA disciplinary action details, click here.
Manish Shah has been the subject of four additional customer disputes, including the following:
• June 2019 – “The customer alleged that she and her husband loaned the (now former) representative $75,000 in 2016 based on Mr. Shah’s representations that he was going to use the money to purchase a retiring agent’s book of business. Mr. Shah has defaulted on the loan repayment.” The complaint was closed with no action.
• March 2019 – “Representative was discharged, while under internal review for violating firm policy by borrowing money from a customer, following his admission that he altered a document to make it appear that the customer was a beneficiary on his (lapsed) life policy which he then sent to the customer’s CPA as an attachment in an email, and the firm’s discovery that in response to the firm’s investigation request that he produce all communications between himself and the customer’s CPA, the altered document was not included when the Representative forwarded said email to the firm in response to its request.” Manesh Shah was separated from Northwestern Mutual Investment Services, LLC.
• March 2019 – “The customer alleged that the Representative induced her through false representations to lend him $200,000 and also alleged claims including fraud and conversion.” The dispute was settled for $145,865.95.
• October 2005 – A tax judgment/lien in the amount of $45,355.00 was levied.
For a copy of Manish Shah’s FINRA BrokerCheck, click here.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
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