One-time top-ranked broker Antoine Souma (Galliott Capital Advisors) has agreed to a fine of $20,000 and a suspension of two months, levied by the Financial Industry Regulatory Authority (FINRA). Allegations against Souma, who, in 2016, was ranked at number 76 in the list of top 100 financial advisors produced by Barron’s, and headed a team managing $3 billion in client money, were of providing account reports that were ‘incorrect and misleading,’ 6 of them. This was between November 2014 and December 2015 when he was registered with J P Morgan Advisors (known as J P Morgan Securities earlier).
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While not identifying the client, FINRA had made it known to Souma at the start of the year that they would be seeking penalties over the issue. They had also indicated that a U5 filing by J P Morgan was the trigger for their investigation.
Structured products, corporate bonds, municipal securities, and other holdings of the customer were the subject of the inaccuracies in the provided statements. According to FINRA, through his actions, Souma violated:
- FINRA’s Rule 2210 prohibits communications with the public that are inaccurate
- A similar rule of the Municipal Securities Rulemaking Board
- The catch-all Rule 2010 of FINRA that expects high standards of commercial honor
The strictures were accepted by Souma without the acquiescence of denial. The suspension is understood to impact only his brokerage operations and not his RIA. Its effective starting date is the 6th of December.
No comment was forthcoming from Brian L. Rubin, of Washington D.C.-based Eversheds Sutherland, who represented Souma in the proceedings.
Souma had posted ‘strongly disagree’ on the BrokerCheck disclosure regarding this issue and said “Specifically, I did not cause inaccurate documents to be sent to a customer nor did I cause any of my employers to fail to retain any electronic communications.” That comment has since been removed. A report of the final settlement has replaced the comment.
Antoine Souma’s career in the industry
Souma’s securities industry journey started in August 2000 when he joined UBS Financial Services. In March 2008 he shifted to Deutsche Bank Securities and thereafter, in July 2010, to J P Morgan Securities. From 2016 to 2020 he was registered with Morgan Stanley, before joining Insigneo. From July 2020, Souma has been a registered representative of Insigneo Securities, an independent broker-dealer that focuses on international clients. He has been in the business for over 21 years.
In April this year, he started operating Galliott Capital Advisors, his own registered investment advisory firm. Galliott handles $1.4 billion for 63 wealthy clients. It has custody arrangements with the Advisor Services Unit of Charles Schwab & Co., as per its most updated Form ADV filing.
Souma’s brush with the law began in 2016 when he was accused of excessive and unsuitable trading, falsification of performance reports, failure to extend a promised credit line and the improper exercise of discretion, by the founder of an equity firm and oil-and-gas investor Ziad Ghandour.
J P Morgan reached a settlement of $14 million with Ghandour in 2019, against the claim of over $20 million, as per information available on BrokerCheck. There was no contribution from Souma to the settlement and he ‘vehemently denies’ the claimant’s allegations’ as he mentioned in the regulatory filing.
A customer claim of $250,000 for the recommendation of an alternative investment that was unsuitable, showing up on his record, was denied.
In February 2019, in two other client complaints, an expungement was won by Souma through arbitration. The cases:
- A customer had sought $125,000 on account of a variable-rate loan-related unsuitable recommendation. While settling the complaint about $37,500, the panel noted that the customer was “a sophisticated investor and fully understood the consequences” and thought it fit to order an expungement and clear Souma of any wrongdoing.
- Another complaint, in 2004, this time from a customer of UBS, sough $15,000 for unauthorized trading and misrepresentation, which was dismissed. The panel said that the claim “involved a financial transaction outside the services offered by [Souma’s former firm] and did not involve wrongdoing by Claimant.”