Morgan Stanley Ordered to Pay $4.2 Million to Former Clients for Aaron Parthemer’s Activities

Last week, the Financial Industry Regulatory Authority (FINRA) ordered Morgan Stanley Smith Barney, LLC pay two of its former clients a total of $4.2 million. Former Morgan Stanley broker, Aaron Parthemer (CRD#: 2546369), invested client money in a now-defunct Miami nightclub business. FINRA’s decision found Morgan Stanley failed to properly supervise the outside business activities of the former broker.

FINRA ordered Morgan Stanley, pay $3.3 million to lottery winner James Groves and $879,000 to James Asante Samuel, a former NFL cornerback. Both men were former clients of Parthemer while he was a broker with Morgan Stanley from 2009-2011. At their broker’s suggestion, they invested in the “Club Play” nightclub business. The club closed in 2014.

The men were two of six parties to file a 2016 arbitration claim against Morgan Stanley and Wells Fargo. The claim sought a total of $7.8 million in damages for both banks’ failure to properly supervise Parthemer. The former broker was with Morgan Stanley from 2009-2011 and Wells Fargo Advisors LLC from 2011-2015. He was indefinitely barred by the SEC in 2015.

Parthemer has had his share of shady dealings in the past. The SEC fined him in 2017 for violating sections of the Exchange Act and Advisers Act. Another FINRA filing states, that between 2009 and 2013, the former broker:

In 2017, Wells Fargo settled with claimants for disputes related to Parthemer’s activities during his time as a broker with the company. In all, the two banks have reportedly paid more than $7 million to Parthermer’s former clients, which include about 40 professional athletes.

Get Help from Our Investment Fraud Lawyers

At Sonn Law Group, our expert investment fraud lawyers are devoted to protecting the rights of investors nationwide. If you or a loved one has suffered financial losses as a result of broker negligence, contact us today to learn more about your legal options.

Disclaimer: This article contains opinions and NOT statements of fact in any way whatsoever. The information here is general information that should not be taken as legal advice. NO attorney-client relationship is established between you and our attorneys by reading this article. This article is attorney advertising and should not be used as a substitute for legal advice from a qualified securities lawyer.

Rate this post:

1 Star2 Stars3 Stars4 Stars5 Stars
(No Ratings Yet)
Loading...