Michael Milad Tanha (also known as Mikey Tanha) of Beverly Hills California a stockbroker formerly registered with Merrill Lynch Pierce Fenner Smith Incorporated has been fined $15,000.00 and suspended for ten months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that (1) Tanha engaged in outside business activities while associated with Merrill Lynch without disclosing them to the firm and (2) Tanha engaged in securities transactions outside the firm’s auspices. Letter of Acceptance Waiver and Consent No. 20170546503-01 (May 6, 2019).
According to the AWC, Company A, which was founded by Tanha in April of 2016, was established for customers to correspond with celebrities in exchange for a customer’s payment of a fee to Company A. Supposedly, between April of 2015 and December of 2016, Tanha was an eighteen percent shareholder, director and treasurer. The AWC stated that Tanha, inter alia, hired professionals for the company’s incorporation and accounting matters; engaged in capital accumulation efforts on behalf of the company; and marketed the company’s services.
Evidently, Merrill Lynch was not provided information from Tanha about Tanha’s involvement with the outside business until after Tanha already began engaging in it. The AWC revealed that Tanha’s request was promptly denied by Merrill Lynch. Nonetheless, Tanha continued to hold the company’s stock and maintain director status while performing duties for the outside company.
Moreover, FINRA stated that Company B was founded by Tanha in August of 2016 to establish a fitness center. Supposedly, between August of 2016 and May of 2017, a co-founder and Tanha owned the company. Tanha was reportedly tasked with hiring, capital raising, purchasing equipment and marketing the company. Evidently, Tanha never informed Merrill Lynch about his activities in this respect.
Further, the AWC stated that Tanha engaged in other undisclosed outside business activities in 2015 including Tanha selling life insurance to a person in return for commission totaling $40,000.00; referring a person to a real estate agent for a home purchase in return for a $16,000.00 referral fee; and referring a ticket vendor to two companies who hosted music festivals in return for a $12,000.00 fee. All the while, Tanha failed to disclose to Merrill lynch on his compliance questionnaire submissions that he engaged in the outside activities. FINRA found Tanha’s conduct violative of FINRA Rules 2010 and 3270.
Moreover, the AWC stated that Tanha sold away from Merrill Lynch. Particularly, between June of 2015 and February of 2016, two customers of Merrill Lynch and one non-firm customer had been solicited by Tanha to purchase investments in Company A. Evidently, a $250,000.00 purchase was made by one of the investors in Company A in exchange for the stock of Company A, while $100,00.00 was accumulated from the two other investors for Company A convertible debt products. Apparently, Merrill Lynch was not made aware of Tanha’s activities with Company A; nor did the securities broker dealer authorize Tanha’s activities. The AWC added that Tanha misrepresented his activities on the compliance questionnaire submission. Supposedly, Tanha led Merrill Lynch to believe that between May of 2015 and May of 2016, Tanha had not advised customers to engage in securities transactions outside the firms auspices.
Moreover, the AWC stated that Tanha was involved in private securities transactions with Company B. In particular, Tanha voted on issuing investors ownership interests in Company B; and provided prospective investors with investment agreements that Tanha took part in structuring. Apparently, from January to February of 2017, five individuals had been steered by Tanha towards purchasing $150,000.00 worth of investments in Company B. The AWC revealed that Merrill Lynch was never informed by Tanha about his involvement in those private securities transactions. Consequently, FINRA found Tanha’s conduct violative of FINRA Rules 2010 and 3280 as well as National Association of Securities Dealers (NASD) Rule 3040.
On May 17, 2017, Tanha was terminated by Merrill Lynch based upon allegations of Tanha engaging in outside business activities that were not disclosed to the firm; entering into financial transactions without the firm’s approval; and utilizing unauthorized communication channels to disseminate proprietary information.
