Erez Law is investigating claims regarding Aaron Robert Parmether (CRD #2546369, Fort Lauderdale, FL), also known as Ron Parmether. Parmether recently submitted an AWC in which he was barred from association with any FINRA member in any capacity. See FINRA Case #2011030405801. Parmether was associated with Wells Fargo Advisors LLC from October 2011 until his permanent bar. Parmether previously was associated with Morgan Stanley Smith Barney (June 2009 to October 2011).
In 2009, Parthemer and his partner formed PKG, a d/b/a branch office located in Fort Lauderdale, Florida, that was registered through Morgan Stanley and then Wells Fargo, according to FINRA. PKG provided financial “concierge” services to professional athletes who played in the NFL and the NBA. FINRA found that from June 2009 through January 2012, Parthemer participated in an outside business activity involving CP, a nightclub in Miami Beach, Florida, which was owned by several professional athletes in the NFL and NBA who also were customers of Parthemer at Morgan Stanley and Wells Fargo.
In 2011 Parthemer incorporated AMI, which he initially told FINRA was incorporated to pay expenses associated with operating his branch office. Parthemer, however, used AMI to engage in additional business activities unrelated to his branch office such as nightclub promotion and marketing tequila, according to FINRA.
FINRA further found that while associated with Wells Fargo, Parthemer loaned approximately $399,500 to three professional athletes who were owners of nightclub CP as well as customers of Parthemer at Wells Fargo. The loans were not approved by Wells Fargo and prohibited by Wells Fargo’s supervisory procedures, according to FINRA.
In addition, FINRA found that Parthemer participated in a private securities transaction regarding GVC, a startup internet branding company managed by one of his friends. Parmether referred several of his NFL and NBA clients to his friend for the purpose of investing in GVC, according to FINRA. As a result, approximately eight of Parthemer’s clients purchased approximately $3.08 million of preferred GVC stock. FINRA found that this investment opportunity was neither disclosed to nor approved of by Parmether’s member firms.
FINRA also found that on several occasions Parmether provided false information and documents in response to FINRA requests and that Parmether falsely represented to his firms in compliance questionnaires that he was not participating in any outside business activities that required disclosure and that he had not participated in any private securities transactions.
FINRA Rule 3040, formerly NASD Rule 3040, provides that a broker may only sell securities with the knowledge and approval of his or her firm. When a broker sells securities without processing the order through the firm and without the firm’s permission or knowledge, this violates FINRA rules and is known as “selling away.” Federal and state law define securities broadly. Therefore, even products such as leasing arrangements or promissory notes, may be securities which require firm approval. Selling away often involves investment securities that are in the form of a private placement or other non-public investment.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Wells Fargo or Morgan Stanley may be liable for investment or other losses suffered by Parmether’s customers.
If you were a client of Parmether, Wells Fargo, or Morgan Stanley, and have suffered investment losses or financial irregularities, please contact Erez Law to explore your legal options, Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 888-840-1571 or complete our “contact form.”