Daeil Dave Ro of Bellevue Washington a stockbroker and investment advisor formerly employed by Ameriprise Financial Services Inc. has been barred by The State of Washington Department of Financial Institutions from being owner or principal of a broker dealer and ordered to cease and desist from violating the Securities Act of Washington’s anti-fraud provisions based upon consenting to findings that he sold away from his firm. In the Matter of Daeil Ro Order No. S-16-2044-17-CO01 (July 24, 2017).
According to the Order, between 2002 and 2014, Ro and his father, Myung Ro, took part in a scheme where one of Ro’s investment advisory customers was defrauded. Particularly, a customer was convinced by Ro and Myung Ro to invest $2,000,000.00 in South Korea based commercial properties that would be managed by Myung Ro and Ro’s stepbrother, Jae Lee. Apparently, the investment had been concealed by Ro from Ameriprise and Ro’s former brokerage firm employers, Citigroup Global Markets, Inc., Waddell & Reed, Morgan Stanley DW Inc. and Merrill Lynch, Pierce, Fenner & Smith.
The Order stated that Ro’s concealment of his activities was a violation of the firms’ policies, and it allowed Ro to avoid the customers’ transaction having been examined by those firms. Apparently, Ro befriended the customer and provided the customer with assurances that the customers’ Korean investments were fairing positively, which prevented the customer from examining the performance of the investments.
The Order stated that Ro knew that $320,000.00 of the customer’s $2,000,000.00 investment had been diverted by Myung Ro three months following the customer’s investment having been made, where those funds had been utilized to buy real property in Kent Washington for the benefit of Ro, his father and their spouses. Evidently, Ro and his father took steps to conceal the $320,000.00 diversion until the customer sued them in 2014, demanding that the Korean based properties investment be returned to the customer.
The Department of Financial Institutions concluded that Ro placed the securities transactions outside the auspices of Ameriprise and without ever having procured Ameriprise’s authorization. Consequently, the Order stated that Ro violated Washington Administrative Code (WAC) 460-22B-090(2). The Order revealed that he was additionally violated WAC 460-22B-090(19) through engaging in an unapproved private securities transaction in violation of National Association of Securities Dealers (NASD) Rule 3040. Moreover, the Department of Financial Institutions concluded that Ro committed fraud; conduct violative of Revised Code of Washington (RCW) 21.20.110(1)(b).
Financial Industry Regulatory Authority (FINRA) Public Disclosure confirms that Ro has been referenced in two customer initiated investment related disputes pertaining to allegations of Ro’s wrongful conduct while employed by Ameriprise Financial Services, Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc. Particularly, a customer initiated investment related civil action involving Ro’s activities was resolved for $2,000,000.00 in damages supported by allegations that Ro embezzled the customer’s funds through a fraudulent scheme and made misrepresentations to the customer about a real estate investment plan executed away from the firm. Civil Action No. 152105621KNT (Apr. 27, 2016).
Thereafter, a customer initiated investment related arbitration claim that concerned Ro’s activities was settled for $400,000.00 in damages founded on allegations of misrepresentation, misappropriation and selling away regarding the direct investment products that the customer was placed in. FINRA Arbitration No. 16-01709 (Nov. 28, 2017).
Ro was terminated from Ameriprise Financial on June 6, 2016 based upon accusations that he engaged in outside business activities in violation of the firm’s policies.
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