Manish Hemant Shah of Princeton New Jersey a stockbroker formerly registered with Northwestern Mutual Investment Services LLC has been fined $15,000.00 and suspended for 20 months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that he borrowed money from a Northwestern customer and had concealed his activities when questioned about them. Letter of Acceptance Waiver and Consent No. 2019062305901 (Jan. 29, 2021).
According to the AWC, in July of 2016, a total of $75,000 had been loaned to Shah from a Northwestern customer. A loan agreement and repayment schedule had been put together by Shah and the customer for this purpose. FINRA indicated that Shah did not repay the customer as required under the repayment schedule.
The AWC also stated that Shah did not use the customer’s funds like he said he would. FINRA indicated that the customer was told that the money provided to Shah would be used to possibly purchase a book of business held by another stockbroker. Shah used the customer’s money to address personal expenses rather than to acquire that book of business.
There was no point in which Northwestern was notified by Shah regarding the loan that he entered into. The stockbroker did not have any authorization to borrow from the customer for this reason. FINRA indicated that the stockbroker was also issued compliance questionnaires in 2016 and 2017 regarding loans. Shah falsely represented that he never borrowed customer funds. He violated FINRA Rules 2010 and 3240.
The AWC also revealed that in September of 2018, Shah borrowed $200,000 from an insurance customer and later lied about it. Shah took the same path as he did with the first customer. Shah did not acquire a broker’s book of business with the customer’s funds. His loan arrangement was not disclosed to Northwestern Mutual either. FINRA indicated that this customer complained to Northwestern Mutual regarding Shah’s actions at which time Shah admitted to borrowing the customer’s money. He still lied to the securities broker dealer at this point, claiming that he did not borrow from any other customers. FINRA determined that Shah’s actions were violative of FINRA Rules 2010.
FINRA Public Disclosure confirms that Shah has been identified in two customer initiated investment related disputes containing allegations of his improper conduct during the time that he was employed by Northwestern Mutual. On May 3, 2019, a customer initiated investment related complaint regarding Shah’s activities was settled for $145,865.95 in damages founded on accusations of fraud and conversion relating to the customer’s loan to Shah.
Shah is the subject of another customer initiated investment related written complaint on June 28, 2019 in which the customer sought $25,000.00 in damages supported by allegations of the stockbroker failing to repay the customer’s funds on a promissory note.
Shah was discharged by Northwestern Mutual on March 29, 2019 based upon accusations of him borrowing customer funds and for altering documents.