Kabir Gangahar, of Omaha, Nebraska, a stockbroker associated with KMS Financial Services Inc. and managing member of Gemini Capital Partners LLC, has been subject to three regulatory actions, according to Financial Industry Regulatory Authority (FINRA) Public Disclosure.
Recently, United States Securities and Exchange Commission (SEC) filed administrative and cease-and-desist proceedings against Gangahar and Gemini Capital Partners LLC. Case Number 3-22218 (September 30, 2024). SEC found that from January 2020 to December 2022, Gangahar willfully violated Section 206(2) of the Investment Advisers Act of 1940 by “cherry picking” or disproportionately allocating profitable trades to himself at the expense of advisory customers. As a result, the SEC issued an order requiring Gangahar to cease and desist, imposed a 12-month suspension from association with any investment related entities, and ordered disgorgement of $130,322.
On October 16, 2024, a separate regulatory action was initiated by the Nebraska Department of Banking and Finance, which issued an order suspending Gangahar due to his involvement in a cherry-picking scheme in violation of Section 202 of the Investment Advisers Act of 1940. This suspension remains in effect pending an Order to Show Cause. Case No. 000.
Additionally, FINRA filed a disciplinary action against Gangahar on September 10, 2012, under Letter of Acceptance, Waiver, and Consent No. 2010022938801, for exercising discretion in customer accounts without obtaining prior written approval, violating FINRA Rule 2010 and NASD Rules 2110 and 2510(B). Without admitting or denying the findings, Gangahar consented to a censure and a $10,000 fine.
Gangahar was also subject to a customer initiated investment related FINRA securities arbitration claim (FINRA Arbitration No. 10-02666) while associated with Wells Fargo Investments LLC. The customer alleged that Gangahar engaged in unsuitable trading in high-risk leveraged and reverse leveraged ETFs and made misrepresentations of material fact about the risks. The claim sought $50,000 in damages and was settled for $32,000 on March 21, 2011, with no individual contribution from Gangahar.
