The Financial Industry Regulatory Authority (FINRA) has made a preliminary determination to recommend disciplinary action against Arturo Nicolayevsky, an investment advisor, not a broker. The allegation, dated September 28, 2023, and bearing the FINRA Case #20210708478, is a serious matter that merits a detailed understanding.
Understanding the Allegation
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The allegation against Nicolayevsky revolves around the violation of two main FINRA rules – 1210 and 2010. The first part of the allegation states that Nicolayevsky was actively involved in managing the securities business of R.M. Stark without having any FINRA registrations. This is a violation of FINRA rules, which require anyone involved in the securities business to be registered with FINRA.
The second part of the allegation pertains to Nicolayevsky making misrepresentations in loan applications submitted to the U.S. Small Business Administration to obtain PPP loans on behalf of RMST Holding and Premium 72. This is a violation of FINRA Rule 2010, which requires high standards of commercial honor and just and equitable principles of trade.
Lastly, Nicolayevsky is alleged to have violated FINRA Rule 2010 by signing three funding agreements with AMZ Group LLC, where he pledged R.M. Stark’s revenues as security for the loans. This action led to the firm conducting a securities business with insufficient net capital.
Why This Matters for Investors
Such allegations are of significant concern to investors for several reasons. Firstly, they highlight potential malpractice and misconduct by the investment advisor. Secondly, they can lead to financial losses for investors if the advisor’s actions lead to a decline in the value of the securities they manage. Lastly, such allegations can erode trust in the advisor and the firm they represent, leading to potential reputational damage and loss of clients.
Red Flags and Recovery of Losses
Investors should be vigilant for red flags of financial advisor malpractice. These may include unregistered advisors, misrepresentations in loan applications, and inadequate net capital. If you have suffered losses due to such malpractice, it is crucial to seek legal help to recover your losses.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the advisor and company. With over 50 years of experience, successful financial recoveries for investors, and an impressive 98% success rate, they offer free consultations to clients. You can reach them at their toll-free consultation number, 1-800-856-3352. They operate on a “No Recovery, No Fee” policy, which means you don’t pay unless they recover your losses.
FINRA Arbitration is another avenue through which investors can recover losses. This process involves resolving disputes between investors and brokers through an impartial third party, rather than through the court system. It can be a faster and less expensive way to resolve disputes and recover losses.
