Scott S. Niekamp of Chesterfield Missouri a stockbroker currently registered with Northwestern Mutual Investment Services LLC has been fined $10,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that he failed to disclose outside business activities to Northwestern Mutual and had entered into a loan arrangement with a customer of the securities broker dealer. Letter of Acceptance Waiver and Consent No. 2018057421801 (June 9, 2021).
According to the AWC, between June of 2011 and August of 2017, the written supervisory procedures of Northwestern Mutual required stockbrokers to provide it with notice and get its authorization before doing the activities. Niekamp was authorized to be a passive investor in an outside business activity involving Commons Development Company (CDC) which created senior living centers. The stockbroker informed Northwestern Mutual that he was no longer taking any part in CDC as of November 2014.
Between June of 2011 and August of 2017, Niekamp took part in the marketing of CDC to potential investors. The stockbroker placed funds into a possible real estate venture and negotiated land purchases through Urban Prairie Development. Niekamp and investors consulted concerning CDC and its projects.
According to the AWC, Niekamp also maintained an ownership in Keystone Technologies LLC which provided senior living facilities with technology solutions and which worked alongside CDC. Niekamp took part in financing activities for Keystone Technologies.
None of Niekamp’s activities through CDC, Urban Prairie Development or Keystone Technologies had been made known to Northwestern Mutual by Niekamp until 2018. Niekamp also submitted six compliance questionnaires to Northwestern Mutual that contained false statements regarding outside business activities. FINRA determined that Niekamp violated FINRA Rules 2010 and 3270.
The AWC also stated that Niekamp entered into a loan arrangement with a customer of the securities broker dealer. Two loans which totaled $450,000.00 were made by Niekamp when he was not allowed under Northwestern Mutual policy from making loans of this type. The stockbroker never sought or obtained permission regarding the loans. In a compliance questionnaire Niekamp falsely attested to not having loaned funds to customers. Niekamp violated FINRA Rules 2010 and 3240 for this reason.
FINRA Public Disclosure reveals that Niekamp has been identified in four customer initiated investment related disputes concerning allegations of his wrongdoing when he was employed by Northwestern Mutual. On February 12, 2019, a customer filed an investment related arbitration claim concerning Niekamp’s conduct where the customer sought $5,000,000.00 in damages founded on accusations that they were misled by Niekamp in regard to a private equity security and that they did not receive information from Niekamp concerning the investments that they made through him. American Arbitration Association No. 01-19-0000-4668. According to the claim, Niekamp falsely represented the unregistered private security and had breached his fiduciary duty to the customer. The claim alleges that Niekamp was a shareholder in the company that the customer invested in.
Niekamp is also referenced in a customer initiated investment related written complaint which was resolved for $425,600.00 in damages on June 7, 2019 supported by accusations of misleading statements that Niekamp made in regard to the customer’s private equity purchase. The complaint alleges that the stockbroker made omissions about the investments which included his ownership status in the company. According to the complaint, the customer had been falsely assured that their investment would not sustain losses. The unregistered private security transaction was allegedly unsuitable for the customer.
On December 3, 2019, a different customer initiated investment related complaint concerning Niekamp’s activities was settled for $24,016.50 in damages based upon allegations that in October of 2018, the customer was not provided with information concerning the transfer of their mutual funds into a fixed annuity.
Niekamp has been registered with Northwestern Mutual Investment Services as a stockbroker since June 26, 2000 and as an investment adviser representative since April 17, 2007.
