William Joseph Kielczewski (also known as Bill Kielczewski) of Toledo Ohio a stockbroker formerly registered with The Huntington Investment Company has been fined $50,000.00 and suspended for 18 months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based on a FINRA National Adjudicatory Council Decision containing findings that Kielczewski engaged in undisclosed private securities transactions, falsified statements to his employer, and made misleading representations on his Form U4. In the Matter of Department of Enforcement v. William Joseph Kielczewski Complaint No. 2017054405401 (September 30, 2021).
According to the Decision, in 2013, a hedge fund named Mariemont Capital Partners LP was created by Kielczewski and others including Kevin Taylor who was Kielczewski’s supervisor and who headed Fifth Third Securities’ mortgage-backed securities desk. Kielczewski also formed Mariemont Capital which would be the hedge fund’s investment manager. Kielczewski was also one of the managers of MCP GP LLC, who was the general partner of Mariemont Capital Partners LP. Kielczewski gained control of all activities of the investment manager and the general partner.
The Decision states that after Kielczewski became registered with The Huntington Investment Company, he invested in Mariemont Capital Partners LP. He maintained a 22.25 percent interest in both the investment manager and the general partner. On January 22, 2014, Mariemont Capital Partners LP began operations through investing in pools of residential mortgage-backed securities.
Mariemont Capital Partners LP subsequently became a customer of Huntington Investment Company. FINRA states that between January of 2014 and May of 2017, assets of the Fund were held in a Huntington Investment Company account and had been traded through the securities broker dealer.
FINRA indicated that Kielczewski performed activities on behalf of Mariemont Capital Partners LP, which included soliciting investors of the Fund and facilitating investor purchases.
According to the Decision, Kielczewski was terminated by The Huntington Investment Company supported by accusations that he misrepresented an outside business activity and had partaken in private securities transactions. This termination notice led FINRA to investigate Kielczewski for possible violations of FINRA rules.
FINRA eventually filed a Complaint against Kielczewski on May 21, 2019. The Complaint alleged that Kielczewski falsified information to The Huntington Investment Company in violation of FINRA Rule 2010. He was also charged with engaging in private securities transactions in violation of FINRA Rules 2010 and 3280 and National Association of Securities Dealers (NASD) Rule 3040. He was additionally accused of making misleading representations relating to his Form U4 in violation of FINRA Rules 2010 and 1122.
FINRA’s Hearing Panel determined that Kielczewski violated FINRA rules and ordered him to pay a $50,000.00 fine and serve an 18-month suspension. Kielczewski appealed this Decision.
National Adjudicatory Council upheld the Hearing Panel’s findings of Kielczewski selling away. The Decision notes that Kielczewski’s selling away activities included a $303,841.00 investment by WI and RI in 2014, a $3,850,000.00 investment by SCCI in 2014, a $2,150,000.00 investment by SCCI in 2014, a $1,000,000.00 investment by KR in 2016, and a $3,000,000.00 investment by KK in 2016. Kielczewski admitted to having participated in these transactions without getting approval from The Huntington Investment Company.
National Adjudicatory Council also upheld the Hearing Panel’s findings of Kielczewski falsifying compliance questionnaires regarding his activities while registered with Huntington Investment Company. Kielczewski disclosed that Mariemont Capital was an outside business activity where he was a passive minority owner who did not have any obligations or duties. He relayed to his employer that he spent no time on Mariemont Capital during regular business hours and had not solicited those who invested in the Fund. FINRA determined that these statements were false.
The regulator noted that Kielczewski actively solicited sales of Mariemont Capital Partners LP and participated in $10,000,000.00 in the Fund’s investments. He did not maintain a passive role but instead an active role that involved him having the power to control the activities of the investment manager and the general partner.
Kielczewski was registered with The Huntington Investment Company between January 15, 2014, and April 26, 2017.