Nicholas Harris Shermeta (also known as Nick Shermeta) of Minneapolis Minnesota a stockbroker formerly employed by Northland Securities Inc. is the subject of a customer initiated investment related arbitration claim in which the customer requested $409,949.79 in damages supported by allegations that (1) transactions had been effected by Shermeta in violation of Minnesota Securities Act (2) Shermeta breached a fiduciary duty (3) Shermeta negligently transacted in the customer’s account (3) Shermeta executed transactions that failed to be suitable and (4) Shermeta defrauded the customer by making omissions concerning the risks of promissory note investments. Financial Industry Regulatory Authority (FINRA) Arbitration No. 17-02055 (Aug. 16, 2017).
Shermeta has twice been sanctioned by securities regulators founded on accusations of his egregious conduct in the securities industry. Specifically, Shermeta was fined $25,000.00 and suspended from associating with any FINRA member in any capacity supported by findings that he marked the close of Northern Oil & Gas (NOG) shares; conduct violative of FINRA Rules 2010 and 2020. Letter of Acceptance Waiver and Consent No. 2009018801601 (June 13, 2014).
Thereafter, Shermeta was barred by Securities and Exchange Commission (SEC) from being a stockbroker or investment advisor or associating with securities broker dealers or investment advisories according to an Order Instituting Administrative and Cease and Desist Proceedings pursuant to Securities Exchange Act of 1934 Sections 15(b) and 21C and Investment Company Act of 1940 Section 9(b) based upon findings that Shermeta engaged in unregistered securities sales. In the Matter of Nicholas H. Shermeta and Napa Properties LLC Administrative Proceeding File No. 3-17652 (Oct. 31, 2016).
According to the Order, Shermeta facilitated the sale of stock to a customer in a private placement transaction through a Dakota Plains Holdings Inc. predecessor. SEC claimed that Shermeta failed to effect the securities transactions through his securities broker dealer. Evidently, Shermeta received $75,000.00 in commissions through Napa Properties – a company he created to serve as a supposed consultant to Dakota Plains. Apparently, Shermeta failed to inform his securities broker dealer about the transactions. SEC found Shermeta’s and Napa Properties’ conduct violative of Securities Exchange Act of 1934 Section 15(a)(1).
Moreover, on March 22, 2017, Shermeta was charged in the United States District Court for the District of Minnesota with fraud; conduct violative of 18 U.S.C. §1343 (Mar. 22, 2017). Shermeta’s employment with Northland Securities Inc. has been terminated effective November 9, 2016.
