Jay Sailesh Sheth of New York, New York, a stockbroker currently registered with National Securities Corporation, has been fined $20,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings of Sheth’s undisclosed private securities transactions, sharing in customer losses, and use of communication applications to correspond with customers in violation of company policy. Letter of Acceptance, Waiver, and Consent No. 2020065274801 (April 7, 2022).
According to the AWC, from 2016 to 2018, Sheth had customers invest in Private Placements A and B. Another customer was advised by Sheth to invest in Private Placement C. After the customers purchased Private Placement A and B, the issuer’s asset management company indicated that the issuer would not accept new funds and that it was suspending redemptions.
Following an April 4, 2019 announcement of the company not planning to pay distributions, Sheth started making payments to customers. The regulator states that 11 customers who invested in Private Placement A and B were provided with a collective $71,581.00 from Sheth. Sheth also returned the customer’s principal invested in Private Placement C. But he was prohibited from sharing in a customer’s losses according to the securities broker dealer’s policies. Sheth violated FINRA Rules 2010 and 2150(c).
FINRA also states that Sheth engaged in undisclosed private securities transactions, as he and his spouse jointly purchased $171,00.00 worth of investments related to hotel projects. Sheth never informed National Securities Corporation about the private securities transactions. He violated FINRA Rules 2010 and 3280 for this reason.
Sheth also used private communications apps to discuss securities business with customers. This was disallowed under the securities broker dealer’s policy. Sheth violated FINRA Rules 2010 and 4511.
FINRA Public Disclosure shows that Sheth has been identified in two customer initiated investment related disputes containing allegations of his activities while associated with National Securities Corp. On October 21, 2020, a customer filed an investment related FINRA securities arbitration claim concerning Sheth’s activities where the customer requested $2,500,000.00 in damages supported by accusations of an unsuitable private placement by Sheth while he was employed by National Securities Corp.
Sheth is also referenced in a customer initiated investment related FINRA securities arbitration claim in which the customer sought $250,000.00 in damages based upon allegations of mishandling of funds and unsuitable recommendations by Sheth concerning private investments in public equity (PIPES). FINRA Arbitration No. 21-01985 (September 23, 2021).
Sheth has been associated with National Securities Corporation as a stockbroker since January 30, 2004. He has been registered with National Asset Management Inc. as an investment adviser representative since May 1, 2008.
