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January 25, 2022 at 07:58 PM
What You Need to Know
- The former Bank of America broker and advisor trainee allegedly converted $58,000 of client funds for his own use.
- He also allegedly forged a client document.
- In addition, he falsely claimed in an annual compliance certification that he did not engage in outside business activities, according to FINRA.
The Financial Industry Regulatory Authority has barred a former Bank of America broker and advisor trainee after he allegedly forged a client document and converted $58,000 in client funds for his own use.
Joshua David Nicholas also failed to provide written notice to the wirehouse that he was engaged in an outside business activity involving a corporate entity he formed and through which he traded futures contracts, according to FINRA. That entity was a Stuart, Florida-based discretionary managed futures firm called JDN Capital.
Nicholas did not receive approval from the wirehouse to engage in his OBA and “falsely attested in a firm annual compliance certification that he did not engage in any OBAs,” according to FINRA.
Without admitting or denying the regulator’s findings, Nicholas signed a FINRA letter of acceptance, waiver and consent on Friday in which he consented to be barred from associating with any FINRA member in all capacities. FINRA signed the letter Monday.
Nicholas entered the industry briefly in August 2016, when he joined Midtown Partners as a registered broker, according to his report on FINRA’s BrokerCheck website. He left that firm, which FINRA expelled in March 2020, the same month he joined it.
He later served as a general securities representative for BofA Merrill Lynch, from February 2020 to July 31, 2020, according to FINRA. He voluntarily resigned from the firm amid allegations that he forged a client document, according to a disclosure on his BrokerCheck report.
On Aug. 14, 2020, the wirehouse filed an amended Form 5 Uniform Termination Notice disclosing that two of the broker’s clients, referred to in the AWC letter only as customers “A” and “B,” filed an arbitration concerning Nicholas, alleging unsuitable investment recommendations, selling away and omission of material facts, according to FINRA. That dispute was settled for $275,000.
Asked for comment on Tuesday, BofA/Merrill spokesman Bill Halldin told ThinkAdvisor only that “this individual was a trainee to become a financial solutions advisor, so he was not in our Merrill wealth management business.”
Miami attorney Kawa Foad, who represented Nicholas in his dispute with FINRA, did not immediately respond to a request for comment.
Clients Lost Much More
The two OBA clients lost much more than just the funds that were allegedly converted by Nicholas for his own personal use. They lost more than $1 million as a result of his futures trading, according to FINRA.
“In a purported effort to recoup some of their losses, Nicholas convinced” the clients to invest $300,000 in a promissory note with his OBA so that entity could invest the additional funds in securities on their behalf, according to a disclosure on his BrokerCheck report.
