Oppenheimer Named In Customer Securities Arbitrations Involving Selling Away

Zahir Walji, of Austin, Texas, a stockbroker formerly registered Oppenheimer & Co. Inc., was named in two customer initiated investment related arbitration claims between June 6, 2010, and June 10, 2016, in which the customers collectively requested $1,640,000.00 in damages based upon allegations that Walji was liable to customers who had not received repayment of their investments in private business ventures which Walji solicited from them between 2012 and 2013.
FINRA Public Disclosure reveals that Walji has been identified in four additional customer initiated investment related disputes regarding allegations of his misconduct while at Oppenheimer & Co. Inc. and UBS Financial Services Inc. Particularly, on December 23, 2008, a customer initiated investment related complaint involving Walji’s conduct was settled for $50,000.00 in damages based upon allegations that Walji was responsible for the customer’s investment losses associated with auction rate securities.
On December 1, 2008, another customer filed an investment related written complaint concerning Walji’s activities, in which the customer requested $60,000.00 in damages based upon allegations that Walji did not follow the customer’s instructions to reallocate the customer’s investment portfolio.
Subsequently, on April 28, 2016, a customer filed an investment related arbitration claim involving Walji’s conduct, in which the customer requested $2,000,000.00 in damages based upon allegations that Walji effected unsuitable purchases of equities, mutual funds, and other investments in the customer’s account. Additionally, the customer alleged that between December of 2009 to October of 2014, Walji churned the customer’s investment accounts, breached his fiduciary and contractual obligations, and defrauded the customer.
Walji was previously fined $7,500.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he engaged in outside business activities without the approval of his firm. Letter of Acceptance, Waiver and Consent, No. 2012034370501 (Apr. 24, 2015).
According to the AWC, from April of 2011 to October of 2012, at which time Walji was associated with UBS Financial Services Inc., he had taken part in six private securities transactions and two outside business activities, despite not having made his firm aware of his conduct via written notification. Particularly, Walji was an officer of entity SCM, LLC, and partner of entity, LOI, LP. The AWC stated that Walji’s failure to notify his firm of his involvement with these entities constituted conduct violative of FINRA Rules 2010 and 3270.
Additionally, the AWC stated that Walji sold $90,000.00 worth of HCI, LP limited partnership interests investments to six of the firm’s customers. These investment transactions were reportedly not disclosed to UBS by Walji. FINRA found that Walji’s failure to notify his firm and gain approval in this regard was considered conduct violative of FINRA Rule 2010 and NASD Rule 3040.
FINRA also cited Walji for failing to comply with the firm’s imposed conditions on Walji pertaining to HCI. Particularly, the firm was reportedly aware of Walji’s involvement with HCI, which Walji claimed he was a partner of. Critically, the firm stated that he was allowed to participate in HCI as long as he did not pool money with investors or solicit customers to make investments in HCI. The AWC revealed that Walji not only facilitated the limited partnership transactions in HCI, but also pooled funds with firm customers for investments in HCI.
Additionally, Walji indicated to UBS that he owned a real estate investing and holding company, TE. Apparently, Walji’s permission to be involved with TE was granted by UBS conditioned upon him not taking part in real estate transactions via TE, nor receiving finder’s fees pertaining to his conduct while working at TE. However, Walji reportedly generated a $84,600.00 finder’s fee via his part in a real estate transaction. Consequently, FINRA found that Walji’s conduct was violative of FINRA Rule 2010.