Sylvester King Jr., of Fort Lauderdale, Florida, a stockbroker formerly registered with Wells Fargo Advisors, LLC, was subject of a Securities and Exchange Commission Administrative Order, in which King was ordered to cease and desist from causing future violations of Securities Exchange Act of 1934 Sections 15(a) and 17(a)(1), Rule 17a-4(b)(4), as well as Investment Advisers Act Sections 206(1) and 206(2), based upon King’s consent to findings that he engaged in fraudulent business activities and effected unregistered securities transactions. In the Matter of Sylvester King Jr., File No. 3-17839 (Feb. 10, 2017).
According to the Order, from 2009 to 2012, at least $5,000,000.00 in illiquid and unregistered securities issued by Global Village Concerns, an internet based branding business, were sold to investors via King’s participation. Apparently, the investors were comprised of professional athletes and customers of an investment advisory that King interacted with. The Order stated that investment advisory customers’ purchases were induced by King’s misrepresentations, where he failed to properly conduct due diligence in reference to the Global Village Concerns investment opportunity. King also reportedly corresponded with customers outside of Wells Fargo’s approved communication channels to effect the transactions, and never furnished information in this regard to his firm for record retention.
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that on July 28, 2015, King’s securities registration was revoked by FINRA based upon allegations that he did not cooperate with the sanctions imposed upon him by FINRA in connection with King’s previous regulatory infraction. Particularly, King was fined and suspended eighteen months from associating with any FINRA member in any capacity by consenting to findings that he sold away from his firm, engaged in an unauthorized loan arrangement, and falsified information in his firm’s compliance questionnaires concerning his business activities. Letter of Acceptance, Waiver and Consent, No. 2013036262101 (Apr. 27, 2015).
According to the AWC, King effected an unauthorized $25,000.00 loan arrangement with a customer, helped a registered representative conceal nearly $400,000.00 worth of customer loans, and partook in a private securities transaction with eight customers that involved $3,000,000.00 in investor funds. FINRA found King’s conduct to be violative of FINRA Rules 2010, 3240 and 3040.
King has been identified in seven customer initiated investment related disputes containing allegations of his wrongdoing while employed with Wells Fargo Advisors, LLC and Morgan Stanley Smith Barney. Specifically, on May 23, 2016, two customer initiated investment related arbitration claims were resolved for $415,920.84 in damages based upon allegations including, inter alia: unsuitability; fraud; breach of fiduciary duty; breach of contract; and misrepresentation in reference to customers’ private placements effected by King away from Morgan Stanley Smith Barney.
On August 10, 2016, another customer initiated investment related arbitration claim regarding King’s activities was resolved for $1,100,000.00 in damages based upon allegations that King made recommendations to the customer concerning investments that the firm never authorized. Subsequently, on June 9, 2016, a customer filed an investment related arbitration claim involving King’s conduct, based upon allegations against King of unsuitability and misrepresentation in reference to the customer’s Global Village Concerns, Inc. investments.
Moreover, on July 15, 2016, customers filed an investment related arbitration claim regarding King’s activities, where the customers collectively requested $7,818,162.85 in damages based upon allegations that King made unsuitable investment recommendations to the customers regarding transactions effected away from King’s employer. Further, on April 6, 2017, a customer filed an investment related arbitration claim involving King’s conduct, in which the customer requested $1,622,844.00 in damages based upon allegations against King of unsuitability.
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