The Financial Industry Regulatory Authority announced Wednesday that it had expelled Washington, D.C.-based Success Trade Securities Inc. from membership and barred its CEO and president, Fuad Ahmed, for defrauding 59 investors, mainly NFL and NBA players.
The FINRA hearing panel has also ordered the firm and Ahmed to jointly and severally pay approximately $13.7 million in restitution to those investors.
Many of the players involved were clients of now-barred financial advisor Jinesh “Hodge” Brahmbhatt and his now-defunct investment advisory firm, Jade Private Wealth Management, which referred clients to Success Trade in exchange for kickbacks.
According to an investigation by Yahoo Sports, those players included San Francisco 49ers tight end Vernon Davis, Cleveland Browns cornerback Joe Haden, former Washington Redskins running back Clinton Portis, former Chicago Bears defensive end Adewale Ogunleye, Miami Dolphins defensive lineman Jared Odrick, Oakland Raiders defensive tackle Pat Sims, Minnesota Vikings defensive tackle Fred Evans and Milwaukee Bucks guard Brandon Knight. The athletes involved were not named in the FINRA complaint.
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In April 2013, FINRA issued a complaint and filed a temporary cease-and-desist order against Success Trade Securities, an online broker-dealer, and Ahmed charging fraud in the sales of promissory notes issued by the firm’s parent company, Success Trade Inc. The panel found that from February 2009 through March 2013, Ahmed and Success Trade sold $19.4 million in promissory notes to investors while misrepresenting or omitting material facts, which, the decision notes, would have revealed that the parent company was in dire financial condition.
During the hearing, a FINRA news release states, “Ahmed admitted that the parent company lost money every year in the last 14 years except for 2007.”