Lilia Nia (also known as Lilia Niyazova), of Fairfield, New Jersey, a stockbroker registered with Purshe Kaplan Sterling Investments Inc. (PKS), has been fined $5,000.00 and suspended for twelve months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Nia engaged in unauthorized trading. Letter of Acceptance, Waiver, and Consent No. 2020065297002 (August 2, 2023).
According to the AWC, in August 2021, PKS submitted an amended Form U5 to FINRA to reflect that a community bank, one of Nia’s customers, had initiated an arbitration against her.
The AWC stated that from 2013 to 2017, the community bank held non-discretionary brokerage accounts with Nia at PKS. Another PKS representative, based in Nia’s office, was a bank advisory board member. However, due to potential conflicts of interest, this representative was not approved to place or accept securities orders for any of the bank’s accounts with PKS. Despite this restriction, between 2013 and 2017, Nia allowed this representative to place orders for securities trades in the accounts on 430 occasions. Many of these trades were unauthorized, as no authorized person from the bank had given directions for them.
This unapproved trading activity, executed by Nia based on the instructions of the unauthorized PKS representative, exposed the bank to risk. From these transactions, Nia earned commissions of close to $1,000,000.00. She then transferred over $370,000 of these earnings to the same unauthorized PKS representative via different financial and business transactions. PKS didn’t have a fixed-income trading desk, so they often had to rely on an intermediary broker for acquiring fixed-income securities on behalf of the bank. This resulted in the bank incurring about $1,250,000.00 in markups to this broker on top of the commissions they paid to PKS. Additionally, the bank had to spend over $600,000.00 to manage and mitigate the risks associated with their portfolio due to the trades made.
Therefore, FINRA found that Nia violated FINRA Rule 2010.
FINRA Public Disclosure shows that Nia was also referenced in a customer initiated investment related complaint that was settled on January 30, 2023, for $425,000.00 in damages based upon allegations that Nia made unsuitable recommendations, committed fraud, and breached her fiduciary duties in connection with the sale of asset-backed debt products when Nia was associated with Purshe Kaplan Sterling Investments Inc.
Nia was associated with Purshe Kaplan Sterling Investments Inc. as a stockbroker from September 3, 2013, to February 26, 2021.
