- May 23, 2020
- Merrill Lynch
Christopher Roumayeh (CRD # 4510051) was a Financial Advisor at Merrill Lynch in Bloomfield Hills, Michigan. Christopher Roumayeh has been in the securities industry since 2002 and previously worked at Citigroup Global Markets.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on May 20, 2020, FINRA sanctioned Christopher Roumayeh, suspending him from associating with a brokerage firm for 21 months and fining him $15,000 after consenting to findings that he engaged in unauthorized outside business activities. Specifically, the FINRA sanction states:
“Without admitting or denying the findings, Roumayeh consented to the sanctions and to the entry of findings that he engaged in outside business activities without providing prior written notice to his member firm. The findings stated that Roumayeh and a firm customer purchased a franchise involved in the professional video gaming industry. As the owner, Roumayeh managed the franchise’s day-to-day operations. Roumayeh also formed corporate entities related to the franchise’s operations, served as an officer and director for them, and solicited prospective investors in the franchise. Roumayeh concealed his relationship with the entities by forming them in his wife’s name and named her as the sole authorized representative on an entity’s bank account. In addition, Roumayeh formed and managed a separate limited liability company that he purchased commercial real estate through. Roumayeh also made false statements to the firm on annual compliance questionnaires concerning his outside business activities. The findings also stated that Roumayeh participated in a private securities transaction without providing prior written notice to or receiving approval from his firm. Roumayeh solicited and facilitated the investment of a publicly-traded company in the franchise. Roumayeh’s participation included identifying other potential investors, responding to questions from the company during its due diligence, and negotiating the terms and structure of the company’s investment. To facilitate the company’s $5.5 million investment, Roumayeh formed a new holding company that he sold and issued shares of preferred stock to the company through.”
Outside business activities are closely monitored by brokerage firms and regulators to ensure that Financial Advisors do not involve customers in investment opportunities that are not approved by the broker’s employing brokerage firm. This practice is known as “selling away.”
FINRA strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
A For a full copy of Christopher Roumayeh’s FINRA disclosure report, click https://brokercheck.finra.org/individual/summary/4510051#disclosuresSection.
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.
The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.