FINRA Bars Imdadur “Gino” Rahman Merrill Lynch Broker for Multiple Compliance Violations

Imdadur “Gino” Rahman, a seasoned broker with over 26 years of experience in the financial industry, has been permanently barred by the Financial Industry Regulatory Authority (FINRA) for multiple compliance violations. The disciplinary action is a result of Rahman’s improper conduct while dealing with an elderly client during his tenure at Merrill Lynch.

Settlement Letter Reveals Breaches of Industry Regulations

The settlement letter, finalized on Monday, outlines several instances where Rahman violated industry regulations designed to mitigate potential conflicts of interest for brokers:

• From December 2021 to August 2022, Rahman facilitated the designation of his wife as the beneficiary for two Merrill accounts belonging to a nearly 80-year-old customer. To circumvent Merrill’s rules prohibiting brokers or their family members from serving as beneficiaries, Rahman falsely identified his wife as the customer’s niece.
• Between December 2021 and July 2023, Rahman engaged in an unapproved outside business activity, receiving $116,000 from an elderly customer for various services, including purchasing furniture and groceries and providing transportation to appointments. Aware that he was not permitted to receive these payments directly, Rahman instructed the customer to write checks to his wife instead.
• From August 2022 to July 2023, Rahman accepted monetary gifts totaling more than $47,000 from the customer to pay off his outstanding bills. He failed to disclose these gifts to Merrill and falsely stated on compliance questionnaires that he had not received any unreported gifts.

Violation of FINRA Rule 2010 and Lawyer’s Statement

FINRA determined that Rahman’s conduct violated Rule 2010, which requires brokers to maintain high standards of professional conduct. The settlement letter does not specify whether the elderly customer filed a complaint, and Rahman’s BrokerCheck record shows no instances of any disputes.

Todd A. Holleman, Rahman’s lawyer from Miller Johnson in Detroit, stated to AdvisorHub.com that throughout his career, Rahman was dedicated to providing the best possible service to his clients and is glad to have resolved this matter as he enters retirement.

Aftermath and Career History

Rahman accepted the bar without admitting or denying the findings. In October 2023, he registered with L.M. Kohn & Company, an independent broker-dealer in Troy, Michigan, after being fired by Merrill over allegations similar to those outlined in the settlement.

FINRA’s investigation originated from Merrill’s U5 filing, and a spokesperson for the wirehouse declined to comment on the matter. Rahman’s career in the financial industry began in 1994 at Montano Securities Corp., followed by a six-year stint at UBS Wealth Management USA before joining Merrill in 2005.

Investment Fraud Red Flags

When dealing with financial advisors, it’s crucial to be aware of potential red flags that may indicate investment fraud:

• Unregistered professionals: Be cautious of advisors who are not registered with regulatory bodies like the SEC or FINRA, as they may not be obligated to act in your best interest and could lack proper qualifications.
• Unclear fee structure: If an advisor cannot clearly explain their fees or is not transparent about how they make money, it could indicate hidden costs that eat into your investment returns.
• Unsolicited offers and aggressive sales tactics: Be wary of unsolicited investment pitches, especially those that pressure you to invest immediately without allowing time for research.
• Unrealistic returns and guarantees: Promises of high returns with minimal risk or guaranteed performance should raise suspicion, as all investments carry some degree of risk.
• Complex strategies: Avoid advisors who use overly complex investing techniques that they cannot explain clearly, as legitimate professionals should be able to communicate their strategies effectively.
• Missing documentation: Be cautious of investments lacking proper documentation, such as a prospectus or offering circular, as this could indicate unregistered securities.
• Unusual payment methods: Requests to wire money to overseas accounts or use unconventional payment methods like cash or gift cards should raise red flags, as these leave little recourse if the investment is fraudulent.

To protect yourself, always research an advisor’s background, ask about their compensation structure, and be cautious of unrealistic promises. If an investment opportunity seems too good to be true, it likely is.