Imtiaz A. Khan (also known as Raana Khan) of New York the former executive vice president and managing partner at Windsor Street Capital LP has been fined $20,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon an Order Accepting Offer of Settlement containing findings that (1) Khan had no authorization to engage in mergers and acquisitions consultations as an outside business activity and (2) Khan worked in a supervisory capacity without having been registered as a principal. Department of Enforcement v. Imtiaz Khan Disciplinary Proceeding No. 2016048912703 (Jan. 28, 2019).
According to the Order, in April of 2015, as an outside business activity, Khan performed work for a mergers and acquisitions consulting and real estate business. That business came to be known as Arcis Capital Partners, LLC – created by one of Khan’s associates. The Order stated that Khan contributed towards the firm’s launch, in which Khan provided advice relating to the formation of the company, pitch to prospective investors, and establishment of Arcis accounting, legal and banking relationships. The Order stated that in April of 2015, Khan was provided a five percent ownership interest in Arcis in return for his services. Khan was also reportedly entitled to a cut in Arcis’ profits.
Apparently, from April of 2015 to May of 2016, further services were provided to Arcis by Khan, including Khan’s expertise relating to securities and broker-dealers; Khan’s procurement of customers for purposes of Arcis investments, deals and projects; Khan’s development of advisory and banking transactions on behalf of Arcis; and Khan’s procurement of credit to finance the firm and its affiliates.
Critically, the Order stated that Khan had not informed his employer about his involvement with Arcis in any capacity and at any time. The Order stated that in December 2015, Windsor Street required Khan to complete an Other Business Disclosure Form in regard to Khan’s outside activities. Khan reportedly failed to provide that document to the firm in reference to Arcis. FINRA found that Khan’s failure to disclose outside business activities was violative of FINRA Rules 2010 and 3270.
Moreover, the Order stated that between July of 2000 and December of 2017, Khan had not maintained any principal registration. Nonetheless, between January of 2013 and March of 2016, Khan – the executive vice president – was the second most powerful person at Windsor Street. The Order further stated that Khan’s actions demonstrated that he managed the firm’s securities and investment banking business. The Order revealed that in one case, Khan was a member of the firm’s Investment Banking Committee and also the Managing Director of its Investment Banking Committee. Accordingly, Khan reportedly provided authorization for Windsor Street’s new investment banking customers, took part in the negotiation of Windsor Street’s private placement agreements; analyzed offering documents and terms sheets; and approved of unregistered securities sales effected by brokers of the firm.
The Order additionally stated that Khan took part in the review and negotiation of agreements entered into by vendors, auditors and clearing firms. Moreover, Khan reportedly took part in reviewing allegations of misconduct in customer accounts. The Order stated that Khan’s activities were unauthorized because he was not registered as a general securities principal. Consequently, FINRA found that Khan’s conduct was violative of FINRA Rule 2010 and National Association of Securities Dealers (NASD) Rules 1022 and 1021.
FINRA Public Disclosure confirms that Khan is the subject of a customer initiated investment related arbitration claim in which the customer requested $51,333.21 in damages founded on allegations of the customer incurring unwarranted losses on penny stock transactions executed in the customer’s account while Khan was associated with Windsor Street Capital L.P. FINRA Arbitration No. 17-01839 (Jan. 19, 2018).
Khan’s registration with Windsor Street Capital, LP has been terminated as of May 31, 2018, by which point the firm was expelled by FINRA. Since August 6, 2018, Khan has been associated with Joseph Stone Capital L.L.C.
